When I suggested to a senior Andersen management partner that this perverse incentive system was at work, he thought I was crazy—and told me so. He thought that clients later accused of fraud must have been audited by inexperienced junior partners, not senior partners near retirement. I asked him to look up the data. One thing accounting firms are good at is keeping track of data. That is their business. Sure enough, to his genuine shock, he found that big litigations were often tied to audits overseen by senior partners. I bet that was true at every big accounting firm, and I bet it is still
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