Interest of the public The companys interest

Their self interest

Conflict of interest Have led to increased legal and moral standards of professionalism

Since 1980s Several accounting scandals Result of misleading financial analysis, creative accounting

Nugan Hand Bank, Phar-Mor, WorldCom, and AIG.

Widely-reported violations of accounting ethics Enron. Arthur Andersen auditors of Enron.

Shareholders of Enron lost $25 billion Loss of 85,000 jobs due to closure of Arthur Anderson.

Before 1977 auditing firms not allowed to advertise to Clients.

Allowing the firms to advertise Business side of accounting firms dominated professional side.