This study considers three highly recognised corporate scandals that occurred in three diverse continents during different time periods. These are Enron Corporation (United States of America [USA], 2001], Polly Peck International (PPI) (United Kingdom [UK],1990] and Satyam Computer Services Ltd (India, 2009). Arthur Anderson LLP (USA), Stoy Hayward (UK) and Price Waterhouse (India) performed as statutory auditors in these three companies respectively. This study analyses statutory auditors' independence in these select cases based on nine parameters. Investigated facts on these parameters are compared with current regulatory requirements in order to explore the deviation for the case indicating the extent to which statutory auditors' independence was lost in each scandal.
The study finds that statutory auditors in all three cases had enough reasons to compromise their independence. Their activities against most of the parameters were not in compliance with current regulatory requirements. Appointment procedure of statutory auditors, provision of non-audit services and remuneration arrangement threatened statutory auditors' independence in all three scandals. Safeguards available in the form of audit committee, external review and disciplinary framework were also not adequate. It ultimately caused statutory auditors in all three companies to compromise their independence.
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