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Big Four alumni can bias auditors

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Feb 08, 2018

On February 8, 2018, Accounting Today released an article on a new academic study that scrutinizes how bias may play a role when an auditor used to work in the same accounting firm as the CFO of the company being audited.

The study looked at the “familiarity threat” to auditor independence when a CFO or other top executive of a company being audited used to be employed by the firm performing the audit. Before the wave of accounting scandals of the early 2000s, approximately one-third of the biggest U.S. corporations had top executives who were alumni of their companies' outside auditing firms. That included Enron, Global Crossing and Waste Management, which all fell prey to the accounting scandals.

Review the full article on Accounting Today's website.

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