The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors, except
A) the desire to get future auditing contracts from the company.
B) the desire to get consulting work from the company because most audit firms also do consulting work.
C) the fact that auditors are appointed by the firm.
D) the failure of U.S. audit firms to follow internationally accepted accounting standards.

Question

Quizplus · Accepted Answer

The failure of auditing firms in cases like Enron and WorldCom is not attributed to the failure of U.S. audit firms to follow internationally accepted accounting standards. The issues were more related to conflicts of interest and regulatory oversight rather than the standards followed.

The Failure of Many Auditing Firms to Raise Red Flags