Chapter 1567 Audit Storm

Five companies become four. In this way, the other four companies should take off, especially KPMG. The second one committed suicide. In this way, your position will be more stable. .

After thinking too much, the stock prices of the other four companies not only did not rise, but also showed signs of collapse.

Damn, it’s just an audit. To put it bluntly, this is basically a service industry, okay? Integrity is the most important quality.

“How did it happen that it fell apart so quickly without even struggling?

By the way, where is Joseph Berardino? Did something happen to the old guy? "

"Boss, his situation is different. Actually, I just figured it out. Arthur Andersen is a bit like a law firm. Although their total headcount may be close to 100,000, the so-called core personnel are very few."

"Damn it, can you still play like this? Let me tell you, this is not much different from Amway!

Hey, if you need some better personnel. "

"Yes, boss, you can take action. I estimate that several other companies may have already taken action. It's just a brand change. Who cares what company name is used."

William White was a little dumbfounded. As far as he knew, Harvey Pitt was dismissed from get out of class because of improper handling of this matter. However, in William White's view, this handling was actually pretty good.

It's just a pity. Just think about the so-called punishment.

No wonder, no wonder Bushu didn't say any nonsense about promoting employment. It seems that there are experts giving him guidance.

But, are they telling you that Enron is just a trivial matter? You survived 911, so this little disturbance is nothing!

If not to say that Yingjiang is very sad, after 911, the stock price of the United States is actually hovering around the status quo. I dare not say that it has investment value. At the very least, there is really not much risk in it.

Therefore, many bargain hunters are in trouble again. It’s okay if you don’t use leverage. If you use this stuff, your end will basically be liquidated.

William White actually didn't care whether anyone went bankrupt or liquidated his position. What he cared about was that the atmosphere on Wall Street suddenly became very strange.

"Punishment? It's just like a joke." Paul Walker was very angry. He had told Harvey Pitt about the current result.

Do you think those guys will be punished?

You are too young and too naive. Did you see that it is only shareholders and investors who are unlucky?

You bastard, you're totally worthless, and you've made a very bad start.

"This is not the worst. Nearly 100,000 people are unemployed at one time, which can be considered a miracle. But I heard that many big guys said that Harvey Pitt is really not suitable to stay in that position.

Overcorrected paranoia, in short, nothing is difficult to hear.

To say that this guy is quite miserable, why did he encounter such an embarrassing situation? "

"Oh, is it too much? Believe me, Allen, they are brewing a bigger tragedy." As an old fox, Paul Walker quickly figured out the truth. The reason why Andersen went bankrupt was because the Securities Regulatory Commission did not allow it to continue its contracts with commercial users.

Well, if it were another time, he would definitely worship him.

But now? Just two fools!

The company that was selected as the most innovative company in the United States by Fortune magazine has fallen. All the praises now sound more like a joke.

In just over a month, Enron's stock price plummeted from nearly $40 to $4.

And what about Andersen?

We have been auditing Enron since its establishment in 1985. Half of Enron's directors have direct or indirect connections with Andersen, and even the chief accountant and financial director are from Andersen. In the half month since the Enron case broke out, Andersen destroyed thousands of pages of Enron documents.

Strict punishment is actually necessary, but it may be more tragic for Enron, but not necessarily for Andersen. The company went bankrupt and the shareholders went bankrupt, but what about the instigators? It doesn't seem like there's much punishment, right?

"Alan, they are brewing a new tragedy. In order to obtain more benefits, no one cares about breaking any laws. If breaking this law only means losing your job, it doesn't matter."

Greenspan agreed with Paul Volcker's concerns, but so what? Are you planning to do anything wrong? Or do you have the guts to uncover this scar?

Let’s put it this way, the Securities and Exchange Commission has investigated more than a dozen cases where employees or their partners took stock or worked in companies audited by PricewaterhouseCoopers. Just in January this year, KPMG was sued for its investment in a company it conducted. The audited funds were named and criticized by the China Securities Regulatory Commission.

And what about Andersen? It is considered the most enterprising in mixed business operations, with nearly 60% of its partners coming from non-audit businesses such as taxation, business consulting and corporate financial operations.

As accounting firms continue to expand, audit fraud has become a common problem. In the past few years, there have been hundreds of large companies in the United States that have distorted and corrected earnings report data, and behind each of them there are related accounting matters. Make a fake. In this sense, Andersen's integrity crisis is not an integrity crisis for the company.

Supervision of one accounting firm is done by other accounting firms. This means that the entire accounting industry is an industry of self-restraint and mutual supervision. Traditionally, the accounting industry is the watchdog of investors, responsible for supervising the financial behavior of enterprises; the accounting industry has won the trust of society and investors for its independence and impartiality. This is feasible under conditions where industry monopoly is not too strong.

However, the formation of the "Big Five" in the United States and its huge business have made the American accounting industry a highly monopolized industry. Although there is also competition among them, such as fierce competition in terms of customer sources, sites, and talents, in order to compete in these aspects To win, they can restrain each other; but it is undeniable that they also have consistency of interests, such as in mixed operations and industry-related legislation.

At this time, the "Big Five" will collude and form a united front to jointly oppose legislation or policies that are unfavorable to them. When the economy is booming, the problems caused by the mixing of auditing and consulting in the accounting industry are not easy to detect, because the stock market only rises and never falls, everyone is happy, and everyone has money to make; but when the economy is in recession, Bubbles then appeared, and some companies saw huge losses at any time after the bubble. At this time, the integrity crisis emerged, and people discovered that the accounting firm had "bet its credibility." Of course, this kind of breach of trust is not just a problem for a certain accounting firm, but a problem for the entire accounting industry; it is also a problem for social credit. It is not only a certain accounting firm that pays the price for the loss of credit, but also the entire industry. Even society as a whole. Because in this case, people can't help but ask: "Even Arthur Andersen has no credibility, who should I trust?"