Auditing’s Stockholm Syndrome

What was otherwise a routine bank robbery in central Stockholm in August 1973 has far reaching consequences for how independant assurance providers remain independant in the face of both great adversity and great kindness.


On August 23, 1973, Jan Erik Olsson, on leave from prison, walked into Kreditbanken at Norrmalmstorg, central Stockholm and attempted to hold up the bank.

Swedish police were called in immediately, two of them went inside, and Olsson opened fire, injuring one policeman. The other was ordered to sit in a chair and “sing something”.

He started singing “Lonesome Cowboy”.

Olsson then took 4 people as hostages. He demanded his friend Clark Olofsson to be brought there, along with 3 million Swedish Kronor ($730,000 US 1973 value), two guns, bullet-proof vests, helmets and a fast car.

Olofsson was brought in by permission of the government and established a communication link with the police negotiators.

One of the hostages, Kristin Enmark, said she felt safe with Olsson and Olofsson but feared the police might escalate the situation by using violent methods.

Olsson and Olofsson barricaded the inner main vault in which they kept the hostages. Negotiators agreed that they could have a car to escape, but would not allow them to take hostages with them if they tried to leave.

Olsson called up the Swedish Prime Minister Olaf Palme and said he would kill the hostages, backing up his threat by grabbing one in a stranglehold; she was heard screaming as he hung up.

The next day Olof Palme received another call.

This time it was Kristin Enmark – a hostage – who said she was very displeased with his attitude, asking him to let the robbers and the hostages leave.

The drama went on.

On August 26, the police drilled a hole into the main vault from the apartment above. From this hole a widely circulated picture of the hostages with Olofsson was taken.

Olsson fired his weapon and threatened to kill the hostages if any gas attack was attempted.

On August 28 the gas was used anyway, and after half an hour Olsson and Olofsson surrendered.

No one was physically injured.


It was this bank robbery and hostage crisis that gave rise to the concept of the Stockholm Syndrome.

The Stockholm Syndrome is a psychological response sometimes seen in an abducted hostage, in which the hostage shows signs of loyalty to the hostage-taker, regardless of the danger (or at least risk) in which they have been placed.

According to the psychoanalytic view of the Syndrome, the tendency might well be the result of employing the strategy evolved by newborn babies to form an emotional attachment to the nearest powerful adult in order to maximize the probability that this adult will enable — at the very least — the survival of the child, if not also prove to be a good parental figure.

This Syndrome is considered a prime example for the defence mechanism of identification.


So what relevance does the Stockholm Syndrome have to the world of independence assurance?

Does the name of David Duncan help you?

Duncan was the United States Government’s star witness in the Arthur Andersen trial.

He was an Andersen employee for 20 years, who was the partner in charge of the Enron account since 1997, for which he was paid over $1 million.

He was fired from Andersen in January 2002 and charged with obstruction of justice for ordering Andersen staff to shred over a ton of papers related to Enron.

Duncan has said that he ordered the shredding as he had fears over the interpretation that he had provided to aspects of Enron accounting.

Were Duncan’s actions therefore a corporate manifestation of the Stockholm Syndrome.

Did he act in the interests of Enron and not in the interests of providing a fair and balance assessment of their financial status?

Was Duncan somehow “captured” by Enron to the point that he could not otherwise see the failings in his actions?

Even if he didn’t think that he was doing it he ultimately showed loyalty to Enron to the detriment of Arthur Andersen.

In doing so how different was he from the hostages of Kreditbanken?

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