The fraud and corruption that has marked the year in the finance and banking sector (aided greatly by the blindness and ignorance of Congress and the regulating agencies) has exposed a major deficit in the accounting industry.

Our financial system has depended on accurate statements prepared by the accounting industry. The profession has much to answer for when it misses major fraud such as the Madoff scandal. With huge losses for charitable trusts and college endowments the accounting firms involved will likely be in the line of liability fire.

Remember that the fraud at Enron just 8 years ago led to the demise of the then biggest accounting firm in the world, Arthur Anderson.

Expect accounting fees to rise as more time consuming fraud detection audits become more common place, and E&O (Error and Omission) liability policies increase in costs substantially.

Expect to see other top accounting firms join their clients in bankruptcy.