1.     Failure to gather sufficient competent audit evidence (73 percent of the cases)
2.     Failure to exercise due professional care (67 percent)
3.     Insufficient level of professional skepticism (60 percent)
4.     Failure to obtain adequate evidence related to management representations (54 percent)
5.     Failure to express an appropriate audit opinion (47 percent)

In Conclusion

The evidence clearly suggests that, because of shortfalls across the spectrum capital market participants, the value of mandated corporate disclosures continues to diminish. Institutional investors today have few better practical choices than to methodically cultivate greater skepticism, which serves as the organizing principle of forensic analysis.

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