Knowing Your Audience Essay
June 1, 2009
America is aware of the familiar financial collapse of Adelphia Communications Corp., Tyco International Ltd., Global Crossing, and of course the Enron Corp are just a few of the failed amidst allegations of financial mismanagement, poor decisions, and a lack of oversight. The reality is that the aspects of financial collapse begin with a severe erosion and eventual ruination of corporate and personal ethics. In short the companies collapsed ethically long before suffering financial ruins.
In response to the magnitude of the collapse, as well as the sheer number of companies affected, the U.S. Congress passed the …show more content…
There were two problems that caused the scandal for most of these companies and they were the auditors because they were also performing consultant work for the same companies I would call that a big conflict of interest. According to USA Today, in 2002, American Power Conversion, for example had a 5-1 ratio of non-audit fees to audit fees. Apple Computer’s non-audit-to-audit ratio was 12-to-6. The year before Enron’s problems came to the light, they paid former accounting firm Andersen $52 million: $27 million for its non-audit work and $25 million for its audit work, which included tax and consulting services. Let’s stay with Enron for while longer. The employees at Enron were not