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How audit firms are polishing their images

Jaclyn Jaeger | March 19, 2019

Accounting firms have been plagued by reputational issues ever since the collapse of Arthur Andersen in 2002. Fast forward nearly two decades, and the focus has turned to what audit firms are doing to polish their tarnished images.

The facts surrounding Arthur Andersen—the poster child of accounting firm failures—are well known: In June 2002, Arthur Andersen was convicted of obstructing a federal investigation for destroying numerous documents relating to the audit of its client, Enron, a now-defunct U.S. energy-trading and utilities company, notorious for perpetuating one of the biggest accounting frauds in history. Although the Supreme Court reversed Arthur Andersen’s conviction, the damage had already been done, leading to its ultimate demise.

Since that time, numerous investigations and enforcement actions have rocked the audit profession in a sector that has been caught in a mess of high-profile corporate scandals. Whether by the U.S. Securities and Exchange...

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