ABSTRACT
The accounting profession is still striving to promulgate a complete set of principles as the need for the economic information accountants provide continues to expand with increases in the size and complexity of corporations. In order to enforce the provision, the Securities and Exchange Commission (SEC) relied on accounting data in the corporate financial disclosures of their operations. The SEC looks upon defects in the corporate accounting system as serious because "implicit in the requirement to file accurate financial statements is the requirement that they be based on adequate and truthful books and records. The employment by corporations of distinguished firms as auditors has been no guarantee of the detection of fraudulent accounting practices. The outside auditor is a highly skilled professional who examines the accounting data of the corporation independently, according to generally 'accepted auditing standards. In addition to the concerns regarding the auditor's responsibility to detect illegalities, the question has arisen of his responsibilities to disclose them.
