The Failure of Many Auditing Firms to Raise Red Flags

question 73

Multiple Choice

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except _____________.

• A) the desire to get future auditing contracts from the company
• B) the desire to get consulting work from the company because most audit firms also do consulting work
• C) the fact that auditors are appointed by the firm
• D) the failure of U.S. audit firms to hire technically qualified professionals