Como Se Pueden Manipular Las Reglas Contables

The collapse of several healthy look companies caused a noticeable decline in general optimism about economic matters. Suddenly, investors’ confidence in proclaimed earning was tarnished by incredibility. The economic system has to regain that confidence; otherwise the whole market would collapse.
What worries Americans most is that they might find themselves stuck in a long period ofstagnation, like the U.S in the 1970’s, economy’s growth would slow, jobs would become scarce, unemployment would rise, stocks would stay flat and families would suffer deep stress. Many people have invested just about everything in the stock market and are scared because their 401(k)’s are being flat for the past years.
Enron “The World Leading Company”, for six consecutive years was selected as the mostinnovative of Fortune’s “Most Admired Companies”. In September 2001, with reported earnings of over $1 billion and an annual growth rate of 68 percent, it was ranked thirtieth on Fortune’s list: American hundred fastest growing companies. However, the problem was being hidden and the books had been cooked; the external auditors contributed to the scandal. In December 2001, Enron collapsed and itwas considered the history largest corporate bankruptcy. In one year, the stock price went from $80.00 to $.80 a share. Tens billions of dollars in shareholder wealth was evaporated. The jobs and most of the retirement funds of Enron’s employees disappeared.

Confidence in big business declined significantly between 1999 and 2002. Ethics is confronted by the ambitions of the company officers.The question is: How can trust be rebuilt? In order to provide credibility to the financial statements the companies hire external auditors in addition to auditing themselves. Credibility is very important to business, especially during these years that many big name companies have been catch in major accounting scandals. Because the external auditors do not work directly for the company, they areless biased. Thus, an external auditor’s approval of the company financial statement is more credible than that of an internal auditor. The accounting firm will provide the certified statements required by the Securities Acts, and this have a relevant meaning to investors’ perception.
One of the most prestigious auditing firms in United States was Arthur Andersen’s. This accounting firm wasfounded in 1913 and was also a substantial economic enterprise. In June 2001, it was a global partnership with annual income of 9.3 billion and 85,000 employees in 84 countries. To be an Arthur Andersen’s auditor was itself a position of considerable prestige; was one of the “Big Five” accounting firms among with Price, Deloitte, Ernst & Young and KPMG. It is ironic; therefore, that ArthurAndersen was the external auditor for at least six major publicly held corporations that were involved in major accounting scandals. These scandals were related to the audits of Enron, WorldCom, Waste Management, Global Crossing, Sunbeam, and Quest. In 2002, Arthur Andersen was convicted of obstruction of justice by a Houston’s Jury in connection with its acquiescence in a document destruction policyinvolving Enron Corporation. This was the first-ever criminal indictment of a major U.S auditor, and notably one in which the auditor’s reputation was clearly tarnished.
The indictment announcement pointed out the low audit quality and created an uncertainty about the veracity of the financial reporting of Andersen’s clients. What was the impact of this situation? The client firm’s stock price wasbe adversely affected, and this impact was more severe when Andersen’ independence were compromised. The market reacted negatively over the stock price of Andersen’s clients in the days surrounding the indictment. The decline of auditor’s reputation affects the stock market’s perception of audit quality.
Meaning and beliefs underlying what is and what is not controllable, are multiple and...