Talking Tax US Audit Board’s Role Still Sparks Debate Two Decades Post-Enron
Jun 25, 2025
In this discussion, Christina Ho, a PCAOB board member, shares her insights from her tenure at the Treasury and supports SEC oversight for auditors. Joining her are whistleblowers Cynthia Cooper and Sherron Watkins, who gained fame for exposing corruption at WorldCom and Enron, respectively. They debate the crucial role of the PCAOB and warn against legislative efforts to dissolve it. The trio emphasizes audit independence, the significance of strong oversight, and the lessons learned from corporate scandals, while navigating ongoing regulatory challenges.
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Enron's Sudden Collapse
- Enron was a top U.S. company known for consistent profits and innovation before collapsing suddenly in 2001.
- Auditor Arthur Andersen gave Enron clean opinions despite obvious financial red flags and conflicts of interest.
WorldCom's Audit Failures
- WorldCom's auditor Arthur Andersen earned twice as much from consulting than audits, incentivizing superficial audits.
- These flawed audit practices failed to detect major frauds, prompting Sarbanes-Oxley to restore trust.
Increased Audit Risks Need PCAOB
- Audit risks increased with new technology and market changes, making PCAOB oversight more crucial than ever.
- PCAOB improves audit quality and consistency, providing a vital check against conflicts of interest.