*have to give scholarly reply to the answer below based on the question in the question line above*

As I see it, the Enron Corporation leak of Internal Controls and Sr. employee’s with concern over the stock price and not the appropriate accounting treatment for Debt and Losses from the SPE’s which should have been consolidated into Enron was the failure and if there was a true moral compass held by Sr. level Management with a solid Internal accounting function reviewing quarterly results and reporting of those results reporting would have corrected this activity. I am also of the belief that the Arthur Andersen Consulting relationship directed the auditing relationship gave room for a blind eye to Enron miss reporting and lack of consolation of the SPEs’. It was only after the split of the Consulting Division to its own Company in Aug 2000 that resulted in a loss to Andersen Auditing of major revenue that was from the Consulting group. I do wonder if Andersen did not split off the consulting arm would the audit group have demanded that Enron report losses from the SPEs’ not consolidated and Debt / Losses for that 5 year period of over $500 Million in 2001. Maybe the Consulting control of Andersen would have continued and dwarfed the auditing group’s revenue and controlled much of their actions.