I need to give scholoarly feedback based on the post below that should be thoughtful and address the situation not just yes i agree

I’m studying and need help with a Law question to help me learn.

For public accounting firms, exist a clear line of independence between auditing a company’s financial statements and providing consulting services. However, in the case of Enron and Anderson, the waters of independence became muddy. To understand a little how this line of independence disappeared, it is important to mention that Andersen had billings averaging 1 million per week, half for auditing services and half for consulting to Enron, a fee that reflects the complexity and the inherent risk in this relationship.

One of the major events caused by the lack of independence between Anderson and Enron was the failure to consolidate Enron’s SPE. Enron reported millions of dollars in earned revenue keeping their losses and debt off the financial reports during the years 1997 through 2000, but later in 2001 Enron and Anderson determined that Chewco Investment SPE should have been consolidated with Enron, affecting negatively Enron’s income statement. The second major failure was the incorrect use of Mark to Market rules. (MTM). Chief accountant of the SEC, Walter Scheutz gave permission to Enron to use MTM to only value Enrons’ natural gas, but Enron used it also to value their electric power contracts. It is obviously that Enron cared more about keeping their fraudulent money than complying with GAAP and SEC regulations, and the consequences of course were immediate.

In the other hand, young partners in public accounting firms are under tremendous pressure to gain and retain highly lucrative engagements, such as Enron. In fact, Duncan’s work as a manager on the Enron engagement was probably what helped him achieve the partnership status. At his only 36 years old, David Duncan became the managing partners on the Enron audit with the support of Goddard, the previous managing partner of Enron audit. Duncan was aware of the aggressive accounting strategies of Enron related to the special purpose entity (SPE) consolidation rules and the Mark to Market rule for valuing the company’s natural gas, and instead of confronting the issue, Duncan turned his effort to help restructure the company’s SPEs to continue qualify these entities as unconsolidated entities. Carl Bass, at that time the quality assurance partner in Arthur Andersen, did not agree with the accounting practices that Enron adopted and he was removed from his job. I think that Bass acted with integrity when he challenged the Enron’s accounting practices that later were tied with the Enron financial collapse. The practice of David Duncan was entirely unprofessional for violate securities laws and the SEC barred him from practicing the profession. In my opinion, personal enrichment was the reason what influenced Duncan behavior. Jane Bryant Quinn once said “when corporate executives and bankers see billions of loose dollars swirling above their heads, it’s just too tempting to hold up both hands and pocket a few millions”.

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