These matters, however interesting, are not the focus of this essay and will play no further part.
The rest of this essay will now concentrate on the role played by Enron's auditors Anderson, and their position in relation to the possible cover up of Enron's vast losses and their possible negligence and lack of professional independence. Anderson where undoubtedly guilty of something; the fact that reports suggest that both Enron and Anderson destroyed thousands of documents and emails would tend to confirm this. Either Anderson where guilty of serious professional negligence, or more sinisterly they had a knowledge of what was going on but remained silent to keep the fees of one of their major clients.
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The fact is that auditors are seen in the public's eyes as being held accountable in cases such as this where the accounts had been signed off. Though in the case of Anderson there could be a degree of downplaying on their role due to the claim by many auditors that if corporate fraud is involved the auditor's responsibility is diminished. This one of the best instances were the audit expectation/ performance gap comes into play. This is "the gap between what society expects from its auditors and what it perceives it receives from them. Though in Anderson's situation it looks as if there could have been a major breakdown of independence within the Houston office, which has lead them to sign off the grossly overstated accounts.
Independence has been referred to as "the cornerstone of auditing". This reflects the fact that if auditors could be influenced by other parties either within the firm being audited, there own firm or by an outsider it makes the job virtually worthless. In order for an audit to be worth something the auditor must be independent in fact and appearance. There are many ways in which independence can be compromised including owning a stake in a company being audited, and having problems challenging work done on a previous audit.
