The auditors were compromised in the 1980's and 1990's no longer having the character to fight for what was right in the courts and in administrative hearings at the Commission; it became far easier to pay insurance premiums, charge outrageous billing rates (read oligopoly) and to scoop up billions in consulting fees, consulting being once a modest part of their practice.
The audit arm of these firms became the talent backwater instead of the talent leader it once was so one has the spectacle of several firms splitting off the money machine, consulting, from the audit/tax sections of the firm, e.g. Arther Andersen and Co. became two: Andersen and Accenture.
Without doing a legal brief, Enron should lead to a major shake up within the profession including the need to have rotation among firms, dual firm opinions on issues raised by the SEC and random re-audits by the GAO paid for by the trading markets.
I find it extremely hard to believe that they weren't using something as fault-tolerant, reliable and with the support and backing that Big Blue provides from the VERY start of their operations including their 'trading' ops ...
You are absolutely correct. My guess though is that the move from balance sheet auditing to systems testing was primarily motivated by cost savings. The biggest problem with large public accounting firms is that along time ago they decided to compete on price rather than on quality. This certainly is not news, especially to attorneys that deal with corporate governance matters. So why has nothing been done about it?