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Introduction

Enron, the seventh top company in the United States until 2001, it collapsed because its’ executive officers: the chief executive officer, the chief operation officer and the chief finance officer used the tool: the accounting standard of “market to market” to accommodate the financial phenomena. “Market to market” is an accounting principle that the focus of its’ financial value is the present market price; however, the Enron’s independent directors independent directors did not audit the problem of the financial situation. “Sarbanes-Oxley legislation” highlights the responsibility of business directors to supervise accounting affairs; similarly, Smith, the Management Consultant from the U.S.A (2007) emphasized that to conform the financial phenomena is not for legal way. Sarbanes- Oxley legislation is a regulation for corporate governance. In Order to fill the gap between directors and accountants, independent directors have to work in audit committee, likewise, executive officers could not change the accounting standard to cover up the financial problems. Therefore, the responsibilities of independent directors and choosing the disclosure and transparent accounting standard are important elements to manage a company.




The responsibilities of independent directors

Wallison, the codirector of American Enterprise institute’s program on financial markets deregulation (2006) believed that independent directors is an important part of corporate governance .He stated that independent directors and the contortion of financial status are problems in some companies. Cornfrod, the Bard college professor (2004, p.7) argued that independent directors failed to avoid the collapse of company at sometimes. These independent directors neglected in their management job. Eichenwarld, the New York Times journalist (2003), cited in Hamon that independent directors intended to do insider trading and...