As new reports and congressional investigations on various aspects of the breakdowns occur, corporations and auditors should address the issues raised so that they do not compromise the reputation of their organizations. At Enron and other companies, weak corporate governance practices apparently permitted managers to engage in sham transactions and misleading financial reporting.
Some outside auditors erred in trying too hard to please an important client, to the point of engaging in criminal conduct. They seem to have lost sight of their professional role of assuring users of financial reports that the statements fairly represent the condition of the corporation and of the fact that reports should communicate, not conceal, the level of risk.