Law Commons^™

"Tax Services" As A Trojan Horse In The Auditor Independence Provisions Of Sarbanes-Oxley, Matthew J. Barrett

Matthew J. Barrett

This article argues that the failure of the Sarbanes-Oxley Act of 2002 (SOx) to prohibit auditors for public companies from also providing tax services to audit clients or their executives and selling tax shelters to anyone remains a Trojan horse that threatens both the investing public and the auditing profession. Although SOx enacted several reforms designed to enhance auditor independence, the legislation and implementing regulations that the Securities and Exchange Commission (SEC) subsequently promulgated allow an auditor for a publicly traded company to provide tax services to the company as long as the audit committee preapproves the engagement. As the …

From Gregory To Enron: The Too Perfect Theory And Tax Law, Christopher H. Hanna

Faculty Journal Articles and Book Chapters

Although financial writers have been using magic terms in describing tax law (and accounting reporting), do such terms and theories really have a place in the law? This Article will show that there is a connection between magic and tax law. In a sense, tax lawyers are magicians in that they are able to structure transactions in a manner to minimize taxes, in many cases, to the complete bewilderment of their clients. Tax lawyers are constantly striving to structure transactions in ways that will withstand scrutiny from both the government and the courts. Experienced and well-informed tax lawyers know, however, …

A Comparative Assessment Of Eu, Uk, French, Australian And Japanese Responses To Auditor Independence: The Case Of Non-Audit Tax Services, Richard Thompson Ainsworth

Faculty Scholarship

Auditor independence was a global concern of financial regulators in the 1990's. Some observers saw this in a positive light, a natural development. Adjusting auditor independence rules was a manifestation of global convergence in corporate governance structures. New rules, especially rules leaning toward a harmonized system were welcome.

There was a more sobering view. This view held that global regulators were less concerned with convergence than they were with a sense of impending disaster. Things had gone too far. Significant, maybe even radical change was needed. The independence of corporate auditors had eroded; trust had been fundamentally compromised in the …

"Tax Services" As A Trojan Horse In The Auditor Independence Provisions Of Sarbanes-Oxley, Matthew J. Barrett

Journal Articles

This article argues that the failure of the Sarbanes-Oxley Act of 2002 (SOx) to prohibit auditors for public companies from also providing tax services to audit clients or their executives and selling tax shelters to anyone remains a Trojan horse that threatens both the investing public and the auditing profession. Although SOx enacted several reforms designed to enhance auditor independence, the legislation and implementing regulations that the Securities and Exchange Commission (SEC) subsequently promulgated allow an auditor for a publicly traded company to provide tax services to the company as long as the audit committee preapproves the engagement.

As the …

Enron And Andersen - What Went Wrong And Why Similar Audit Failures Could Happen Again, Matthew J. Barrett

Matthew J. Barrett

Enron, Accounting, And Lawyers, Matthew Barrett

Journal Articles

Enron's collapse painfully illustrates the importance of financial accounting to all lawyers. Accounting is often referred to as "the language of business." Virtually every lawyer represents businesses, their owners, or clients with adverse legal interests, such as creditors and customers. Especially after Enron, lawyers cannot competently represent clients if they do not grasp certain basic principles about accounting. This article lists the top ten accounting lessons that any lawyer could learn from the scandal. These lessons include the components of a complete set of financial statements, the choices inherent in generally accepted accounting principles, the distortions possible in pro forma …

Even Before Enron: Banking Regulators, The Income Tax, The S&L Crisis, And Deceptive Accounting At The Supreme Court, Stephen B. Cohen

Georgetown Law Faculty Publications and Other Works

Years before the ENRON debacle, the Supreme Court heard a pair of cases involving dishonest financial accounting, Frank Lyon Co. v. U.S. and Cottage Savings Ass'n. v. Commissioner. In both cases, federal bank regulators had encouraged deceptive financial accounting, and the deceptive accounting became the basis for taxpayer claims. The Supreme Court, however, did not comment in either opinion on the deceptive character of the financial accounting that gave rise to tax litigation.

Enron, Accounting, And Lawyers, Matthew J. Barrett

Matthew J. Barrett