- Enron and Andersen
On 22 June, ＮＨＫ（Japan Broadcasting Corporation ）broadcasted a special
night TV program called "Enron Bankrupt : US economy runs off the
rail: Many frauds in back side of its prosperity". It reported also
about its audit corporation of Andersen. It is a famous big company
but it has been said Andersen might advise the frauds. The program
also reported about problems of a mixture with audits and consultancies
of Andersen to Enron. Andersen said to earn two hundred million
dollars by consultancy to Enron. So it did not want to loose the
earning by a law that would prohibit the mixture.
Therefore the program also reported Andersen donated senates to
stop the law. US court rendered a guilty verdict to Andersen for
Enron problem and Andersen had to oblige to suspend its audit business.
The program warned the reliability of US market has lost and its
warning proved to be right as in the next week, another fiscal fraud
made by WorldCom was reported.
- Reports from ISO/CASCO (Committee on Conformity Assessment)
March-April issue of " Management system", bimonthly magazine issued
by ISO headquarter reported on tackling disputable practices in
conformity assessment industry.
In the article it reported that in November of last year ISO Secretary-General
(he died on 21 March 2002) said in his speech at CASCO meeting that
accreditation and assessment bodies should do a better job of policing
their community to weed out malpractice and dishonest operators
to solve a serious challenge by certain number of certification
bodies which act disputable practices in conformity assessment industry.
In the meeting the following three types of problem were identified.
| (1) |
Unethical and illegal practice---forgery of
certification |
| (2) |
Bad/unscrupulous practices---offering cut-rate
or sub-standard certification and providing both consultancy
and certification simultaneously. |
| (3) |
Misleading advertising---misuse of marks of
conformity |
I am deeply concerned with (2) item, because it reminds me Enron
problem as mentioned above.
To the call made by ISO Secretary-General, some reactions from all
over the world are run on the magazine.
I picked up some of them, which are related to the malpractice and
dishonest operators problem due to mixture with both consultancy
and certification.
| (1) |
Niranjan, India: Lack of management commitment
Some certification bodies are playing a dual role by giving
certification and also by providing consultancy under some
other name (I have seen this practice in the middle East and
in India). |
| (2) |
President of a US-based consultancy company:
The bad ones are running it for everyone
In 16 years of attending assessments, I have rarely seen auditors
not give advice, make up requirements, do sloppy audits, barely
look at any records, leave early (this is common) etc.etc.
Usually the results of their opinions and advice are contained
in the written report. Often, the reports are so badly written
that a few days later nobody knows what it meant. Clients
never complain to the registrar. After the auditor leaves,
they complain about the made-up requirements and unprofessional
comments, but they don't want to rock the boat.
There are good auditors and there are good registrars--- but
like the rest of the world the bad ones are ruining it for
everyone. |
| (3) |
President Ron Krebs of Canada; Nobody is in
charge of this field
The conflicts of interest those are all too common- for example,
when a consultant build your system and then also acts as
a so-called independent auditor/registrar. |
| (4) |
Terry Peterson, United Kingdom: Dubious practice
by accredited bodies too
However, the Enron debacle shows the conflict of values which
result when auditing and business advice become tangled. There
has never been any doubt in my mind that there should be strong
legislation to separate audit --- financial, quality, etc.---
from any other activity.
Auditing should be free of any other influence! |
|