Who's Watching the Watchdogs?: In the Wake of Enron: A Survey of State Accounting Board Membership and the Need for Reform

Publication Date: June 2002

Publisher:

Author(s): Ellen Montgomery; Brad Heavner

Research Area: Business

Keywords: Enron; regulatory oversight

Type: Report

Abstract:

The Enron-Arthur Andersen debacle is illustrative of larger problems in the accounting oversight system. Despite a pattern of more frequent and more serious failed audits since the savings-and-loan failures of the 1980s that emptied the pockets of taxpayers and small investors, bad auditors and bad audit firms just keep on auditing without threat of significant penalties for inaction or bad action. Who's Watching the Watchdogs examines potential conflicts of interest in the 51 state agencies with regulatory authority over accountants, known as the state boards of accountancy. It finds overwhelming dominance by accounting insiders.