ABSTRACT
American public accountants faced a crisis in the spring of 2002. More than 300 earnings restatements in 2000 and 2001 revealed just how illusory profits reported during the 1990s had been. Enron’s bankruptcy in December 2001 shattered investors’ confidence, launching a 2,000 point decline in the Dow Jones Industrial Average. Soon after the Justice Department indicted Arthur Andersen for shredding 20 boxes of Enron-related documents, internal auditors uncovered an even more audacious accounting fraud at WorldCom. CPAs, once held in high esteem by the American public, fell below politicians and journalists in public opinion polls.
