2019

The Enron of Quality?

Late last year, the International Organization for Standardization, known as ISO, issued a warning about malpractice and dishonesty in the conformity assessment and third-party auditing system. (See "Keeping Current," p. 18.)

Fast-forward to today: The media is bombarding us with headlines about the Enron/Arthur Andersen scandal. Besides allegations about Enron's dubious outside partnerships and possibly illegal accounting practices, the story revolves around Andersen's dual role as the energy company's financial consultant and auditor. Did Andersen auditors know about Enron's accounting and look the other way to preserve lucrative consultant fees?

More pertinent, does this situation have a parallel in the conformity assessment system, as alluded to by ISO? Could an Enron of quality ever surface?

Dennis Arter, a quality audit consultant and trainer and an ASQ Fellow and national director, doesn't glean any new lessons from the Enron fiasco, but he does see a parallel. "Compliance auditing must be absolutely independent and separate from any consulting activities," he says, "and the separation must be great, visible and known."

Though Arter doesn't necessarily foresee a scandal brewing in conformity assessment, he believes the industry is approaching a crisis as the market contracts. "A couple years ago were the rah rah years," he explains, when new registrars were springing up everywhere. Now more organizations are questioning whether getting registered or reregistering is worth the investment.

Do such economic pressures increase or decrease the potential for abuse?

Jack West, chair of the U.S. Technical Advisory Group to ISO Technical Committee 176 and lead U.S. delegate to the ISO committee for the ISO 9000 family of standards, has a different take. "We all hear complaints, often second or thirdhand, about registrars that 'sell' certificates and other such abuses. Yet seldom are any of the complaints supported with facts or communicated properly." He explains a formal complaint system exists and is "open, ready and even anxious to address valid issues. But we must continually work to improve the system's credibility whether or not the criticisms are valid. The perception of abuse is sufficient cause for ongoing concern and action."

Future issues of QP will include more coverage of this topic. Meanwhile, tell us if you draw any lessons about quality auditing from the Enron scandal. Fill out the survey on p. 113 or go to www.asq.org/mr/marhottopicsurvey.html.


Debbie Phillips-Donaldson
Editor


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