Where were the gatekeepers? Corporate collapse and the role of accountants

While it is generally acknowledged that the key to the recent spate of corporate collapses lies in the lack of effective corporate governance, there are a number of other factors that need to be considered in understanding this phenomenon. These include the new age of materialism that developed during the 1990s and the consequent corporate and investor greed, which contributed to the spiral that led to the demise of corporations such as Enron, WorldCom, HIH, One.Tel and the global accounting firm Arthur Andersen. Compounding these developments in the corporate environment was the behaviour of the traditional gatekeepers, including accountants in particular, who betrayed the public trust. The accounting profession is now paying the price, with increased government regulation and a credibility crisis that will take many years to resolve.