Developing Challenges to Audit Usefulness
internal audit departmentEnron, WorldCom, Lehman Brothers, Bear Stearns, Massey Energy, British Petroleum. Each of these companies is associated with massive destruction of corporate and social value during the first decade of the 21st century. They all harbored unrecognized risks and presented public images that disguised the real dangers of their business models. Nevertheless, in retrospect, warning signs were plentiful and obvious at each company long before disaster struck.
Unhealthy companies often exhibit symptoms like poor internal controls, misaligned incentives, myopic business plans, inadequate risk management, deficient implementation procedures and corrupt company culture. These and other forewarnings were evident in the lead-up to most recent crises.
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