Sorry GZ but your story is nothing new. I recollect a number of 'discussions' between management and auditors over the years. If a 'difficult' problem arose regarding the accounting treatment of certain items in the Financials, management would hint' that it was in the process of tendering out the Audit AND Accounting work for the coming Financial Year, as 'all expenditure must be 'subject to rigorous examination'. Most Accounting/Audit firms (especially the large firms) earn a considerable revenue from their Consulting/Accounting work, even more so since the advent of computerisation. With millions of dollars at stake who is going to resist the temptation to complie with the client's wishes?
How else can you understand the collapse of Enron, HIH etc and the recent dispute regarding the accounting treatment of Current and Non-Current Liabilites in Centro's Fiancial Statements AFTER it encountered financial difficulties?
