The board of directors should also be willing and able to observe and report instances of fraud and potential conflicts of interest. Fraud and conflicts of interest are both issues that played a key part in the demise of Enron and other large corporations. Enron and Arthur Anderson had a relationship that should never have been allowed to occur. Anderson was both the accounting firm, auditing firm, and consultant firm for Enron (PBS, 2002). This was a major conflict of interest. This conflict of interest made it very easy for executives to coerce employees to try to hide the fraudulent accounting. Auditing firms who make a living off of auditing and consulting fees may...
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