Auditor Accountability Attachment Analysis 2022

Running head: AUDITOR ACCOUNTABILITY ATTTACHMENT
AUDITOR ACCOUNTABILITY ATTACHMENT
Name of the Student:
Name of the University:
Author Note:

Auditor Accountability Attachment1
Analysis
During 1998, in Waste Management, Inc. a scandal occurred in the accounting books by
the external auditors. The auditors submitted an unqualified audit report to the company where
fake earnings were reported equal to $1.7 billion. The Founder/CEO/Chairman along with the
top executives were also involved with the auditors who falsely increase depreciation tie length
for their plant & equipment and other property in balance sheet. This act by the external auditors
modifies a departure from the GAAP (Ensscpa.com, 2020).
There must be a proper check on the audit reports and proper sanctions must be levied
over the unqualified auditors. As per PCAOB Rule 3502 is prohibited by Mr. Arthur Andersen
Company for omitting some relevant details and hence sanction will be levied over the whole
firm because he knowingly violated the Public Company Accounting Oversight Board (PCAOB)
rules.
An accountant in Non-CPA under code of professional conduct is similarly responsible
for the accounting statements which are prepared by them. Both the CPA and Non-CPA firms
have similar rules and regulations which needs to be followed while doing auditing of any
company (The CPA Journal, 2020).
There are some ethical issues which forms when non-CPA firms get merged with public
accounting firms and the issues are following:
 Objectivity and independence
 Due professional care and competency
 Conflicts of interest (COI)
 Confidentiality