Anthony Scilipoti

And they weren't required to reserve or put away in reserves any amount of... Well, if it wasn't on the balance sheet, then investors wouldn't have noticed that there was not enough assets perhaps to cover.

And why the implication to Arthur Anderson, which I think is important, and then it's near and dear to my heart, is, you know, the auditors at Arthur Anderson that were working on the file, they ended up signing off on all these things.

Well, when essentially the proverbial hit the fan, all of a sudden they were asking questions and the regulator asked for the working papers of the auditor, the papers of which they would support the audit work, and they knew perhaps that they didn't do enough work, so they shredded the documents.

So all of a sudden they became guilty of

because of their actions.

And so it was found in the courts upon appeal that Arthur Anderson was not guilty, but that was way after the fact because Arthur Anderson was already was brought to its knees and it was over.

It became a scapegoat for everything wrong with accounting at the time.

And look, change needed to happen.

Arthur Anderson was around the world.

All the partners were folded into the other firms.

What are the limitations on audits?

The limitations?

Yeah.

The limitations are you're hired to be independent, to give your independent opinion and attest that the financial statements present fairly in all material respects in accordance with some set of accounting standards and or standards associated with a contract, for example.

And the challenge is time, because you have to do this quickly, pressures on costs.

And essentially, think about it this way.

It's like I tell you, look, I just prepared my report card.

I got an A. I now hand it to you and say, look, it's an A. And if you say that it's an A, I'll pay you X amount of money.

So look at your situation.

You come back and say, well, it's actually not an A.