Question

You are the internal auditors for Enron - What would you have done differently from this fraud from happening?

Answer 1

If I had been the Internal Auditor, Prevention of Such a scandal would still be difficult and there won't lie any responsibility on an Auditor, because Auditing is what related to checking and is completely different from Investigation, However, I might have taken certain steps so that the scandal would have been earlier.

Physical verification of every project, which is an integral part of the audit should be performed effectively and such assets should be matched with is value and income generation in the books, efforts should be such that they cannot transfer anything to any other corporation and inflate the net income.

The audit should be conducted in accordance with all the Standards so that every aspect is covered and nothing is left behind, Financials should be verified to its core background and confirm that such figures are true & fair.

But the thing to remember is that Auditor should have identified the scam earlier but no way he can prevent the scam from happening, where there involve masterminds behind.