The fact that served to startle the investing public the most was that senior and executive levels managers, directors and executives had been at the root of these corporate corruption scandals. The top level managers and executives had delved into acts of corruption knowingly and strategically with the help of their corporate affiliates. However, this was only the tip of the iceberg when compared to the fact that audit firms had been involved neck-deep in these scandalous acts of corruption. Not only had audit firms been involved in these scandals but had supported and assisted their execution. Audit firms had been considered to be the check-and-balance framework.
These scandals served to bring forth previously ignored weaknesses in this system. These weaknesses included aspects such as unnecessary degrees of involvement in the clients business, the involvement of ex-partners in the board of directors after their requirements, unnecessarily slow rotation of the auditors assigned as well as frail audit committee. These weaknesses were made even more precarious by faults in regulatory systems and accounting standards that were exposed during the disclosure of these scandals. This served to exaggerate the magnitude of these scandals and the losses caused to not only investors but also to larger investing parties. This led to the development of a perception regarding the U.S. economy which considered it to be in a weak, vulnerable and chaotic condition. The publicity of failure on the part of public organizations led to the exposing of weaknesses in legislation as well. The authorities responsible were exposed for the flaws in their legislative control system.
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