From Enron to Lehman Brothers: Implications for the Audit Profession

Over the last 50 years, we have witnessed fundamental changes to the role of the auditor. Influenced by critical events (e.g. court decisions, corporate failures, economic melt-downs), audit responsibility has evolved from straight-forward error and fraud detection to the provision of more value-added services for clients and regulators; services that include, among others, reporting on internal control deficiencies, identifying business risks and even providing guidance on these risks¹. As a result, auditors are now not only expected to be fluent in accounting and reporting standards and requirements, but also in a variety topics ranging from the technological to the legal aspects of business and finance. And, while demand for oversight is nothing new, the pressure on the audit function is increasing, largely as a result of what many regulators, politicians and investors perceive as recent, audit-related corporate failures.