BusinessCompany NewsTime hasn’t diminished the Enron effect

Time hasn’t diminished the Enron effect

'The pendulum has swung too far,' is now the refrain you hear among businessmen and accountants as they consider the regulatory fallout from the collapse of Enron

Even as the corporation’s former chairman and chief executive were being
convicted last Thursday on 25 charges of fraud and conspiracy relating to
Enron’s collapse, the refrain was being uttered again about the avalanche of
regulation costing business millions to implement.

That is unlikely to go away entirely even as the lobbying to tone down the
Sarbanes-Oxley Act begins to gather momentum and increased support.

Even if regulation was reduced, the business world is not what it was. The
failure of business ethics among the executives at Enron has damaged the public
view of businessmen to the extent that will take years to recover. Last week’s
verdicts will only lengthen that process.

And there are still issues in the UK to resolve. A month ago, a DTI review
concluded that we do not have enough big audit firms to ensure the right level
of competition. That view has, quite shockingly, taken five years to emerge from
the event that caused the predicament – the demise of Andersen, dragged down as
Enron went under.

We are also still wrangling over auditors’ liabilities and whether they
should face criminal prosecution if they knowingly produce misleading audit
reports. That’s bundled up in the company law reform bill, which has taken six
years to reach its current unresolved stage.

At this pace it’s difficult to imagine when we will finally draw a line under
Enron. What’s clear is that there were lessons about transparency and
accountability that shouldn’t be forgotten.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

4d Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

4m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

4m Alia Shoaib, Reporter
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

8m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

8m Emma Smith, Managing Editor
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

7m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

7m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

8m Emma Smith, Managing Editor