Conclusion

Throughout the twentieth and into the early twenty-first century, clever fraudsters exposed flaws in the nation’s financial reporting system. Some scandals led accountants to write new accounting standards closing perceived loopholes. Other frauds prompted auditors to adopt more rigorous testing procedures. When Congress or the SEC concluded that accountants were not responding adequately to protect the public interest, new safeguards were mandated. Dozens of accounting scandals, including the 14 highlighted in this book, significantly influenced the volume and content of required financial disclosure, the development of GAAP, auditors’ testing procedures, the organizational structure of public accounting firms, and government regulation of the American public accounting profession.