The Enron-Andersen saga has brought to forefront many dormant problems of the auditing profession. It has raised questions about the credibility of the auditors and the auditing profession as a whole. The issues raised are not new; only they were left un-addressed. The apparent nonchalance of auditors to address these concerns is appalling. However, the sudden explosion of Andersen is compelling the profession to acknowledge the existence of problems and seek remedies. Conflicts of interests, systemic loopholes, and lax monitoring mechanism of accountants are some of the areas that have to be attended to. The eruption of Mount Andersen could prove to be a turning point in the history of auditing profession, an inflection point which triggered a tsunami that left in its wake destruction and an opportunity to reform.

Andersen was an honored name. The smallest of the Big Five accounting firms' operations spread across the globe with a turnover of over $9 bn. Its client list read as a `who's who' of the business arena with names such as Ford Motor Company, Merck, Delta Air Lines and Freddie Mac. It seemed as though things were running smoothly for this 100-year-old auditing firm until `Enron' happened. The magnitude of Enron's debacle has put the very survival of Andersen under threat. This volcanic explosion in the auditing profession had to happen one day. Problems in accounting and auditing had been brewing for too long like the lava beneath a dormant volcano. The reluctance on the part of auditors, regulators, companies and investors to address them have finally led to the point where the volcano had to explode.

The criticality of the auditors' role is that of a mechanism which guarantees the `true and fair' view of the state of affairs. If the financial statements said that qualified auditors certified them, they were considered to contain a stamp of authenticity and a seal of authority. But that trust and faith seems to have eroded in the light of numerous accounting scandals that have come into light over recent years. Auditing today is suffering from a serious credibility crisis.

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