“It’s easy to miss something you’re not looking for.” This statement not only applies to the awareness test but also highlights the Enron and Arthur Andersen scandal. Enron was “one of the world’s largest energy, commodity, and service company.” Arthur Andersen was “one of the Big Five accounting firms.” Together, they are synonymously and infamously known for one of the world’s largest accounting scandals. Enron did not properly follow GAAP, inflated its assets, and re-routed liabilities, to create an attractive balance sheet. A company that is well known like Enron could not deceive investors without help from an auditing service. Arthur Andersen filled this role for Enron, declaring the proposed balance sheet as valid. Andersen did not comply with GAAS (Generally Accepted Auditing Services) and was receiving large amounts of money for being ‘friendly‘ to Enron. Together, the leaders of Enron and Andersen mislead investors and the public to gain personal wealth.

How do we know the dominating companies of today are not using similar tricks? Are scandals similar to this one the reason for the implementation of IFRS (International Financial Reporting Standards)? These matters boil down to an ethics debate, which proves how relevant ethics is becoming in the business world today.