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Enron, WorldCom, Andersen et al.: A challenge to modernity

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>08/2004
<mark>Journal</mark>Critical Perspectives on Accounting
Issue number6-7
Volume15
Number of pages23
Pages (from-to)971-993
Publication statusPublished
Original languageEnglish

Abstract

This paper uses the lens of Anthony Giddens' theories regarding the mechanisms which sustain late-modernist societies [The Consequences of Modernity, Polity Press, Cambridge, 1990; Modernity and Self-Identity, Polity Press, Cambridge, 1991] to analyse the 2001 and 2002 accounting and audit failures at Enron, WorldCom and Andersen. Assessments of risk and trust play a central role in Giddens' model, and this paper traces an escalating withdrawal of trust in systems of audit and accounting, and related increased perceptions of risk in corporate investment instruments. It also analyses regulatory responses aimed at sustaining or regaining public trust, and argues that failure to sustain such trust risks compromising the continued momentum of late modernity and the interests of people who benefit from institutions of late modernity. © 2004 Elsevier Ltd. All rights reserved.