[Bernard]

And there is another set of auditors that seemed to have missed this - the bank internal audit group, and the auditors tied to the regulatory agencies (Fed, Treasury, OCC, etc.) who rely on bank internal auditors to provide oversight on the details.

The entire audit profession took a major hit on this. Auditors have to maintain professional skepticism, and sometimes open the filing cabinet drawer to see if there really is a piece of paper with a customer's signature in there. (That refers to Penn Square, the Enron of the 60's or 70's). By the way, the firm that blew that one survived for a while, then got name-changed several times from one of the Big 8 to one of the Big 5.

And to address another poster's comments: the first rule of financial investments is Diversify, Diversify, Diversify. There are laws that allow companies to violate this basic principle, and guess who wrote those laws?

[Fishtalk]

And there is another set of auditors that seemed to have missed this - the bank internal audit group, and the auditors tied to the regulatory agencies (Fed, Treasury, OCC, etc.) who rely on bank internal auditors to provide oversight on the details.

You're right. All they probably wanted was a certified financial statement, which AA provided.

I've worked for government contractors and EVEN the government only wants that certified financial statement. It would seem the bank internal audit group finally got wise and dug a bit deeper because Enron's credit was eventually completely destroyed.

Through this all, it's AA I'm looking at long and hard. Such as "audited" financial statements might well be a laugh in the future.