Do Auditors Bear Some Responsibility for the Financial Crash of 2008?

by Miguel Negrete, Daniel Morgan, and Michael Elming
Faculty advisor: Dr. Sue Cullers

This project involves an in-depth look into the accounting and auditing problems that may have contributed to the financial crisis of 2008. This goal will be reached by examining the financial auditors’ responsibility for the crash and what financial practices may have contributed to the crash. Our goal is to find out if accountants and auditors bear any responsibility for the crisis. We will be exploring the lack of regulations regarding financial derivatives and how Lehman Brothers’ fraud contributed to the crisis. Was Ernst & Young responsible for approving the use of creative accounting practices? Lastly, what are the outcomes of the crisis regarding new regulations and the survival of Ernst & Young? Are the big four still going to rule the accounting world? If not, how is this going to impact accountants in the upcoming years?