Case Analysis Arthur Andersen: Questionable Accounting Practices ●Introduction Arthur Andersen LLP‚ which is over a span of nearly 90 years‚ would become one of the "Big five" largest accounting firms in the United States. Moreover‚ the accounting firm seen as the symbol of trust‚ integrity and ethic. The good reputation is derived from the advent of consulting business‚ which was developed by Leonard Spack. However‚ with the growth of consulting services‚ many accounting firms viewed it as a
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Arthur Andersen LLP v. United States The parties: In Arthur Andersen LLP v. United States‚ the plaintiff was the United States. The United States was also the Appellee. Arthur Andersen is the defendant as well as the appellant. The history: Arthur Andersen was found guilty at the jury trial. The U.S. Court of Appeals for the Fifth Circuit also affirmed him guilty. The U.S. Supreme Court reversed Andersen’s convictions due to “flawed jury instructions.” The facts: Arthur Anderson formed a crisis-response
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Arthur Andersen: Questionable Accounting Practices 1. Describe the legal and ethical issues surrounding Andersen ’s auditing of companies accused of accounting improprieties. The legal issues that surrounded Andersen ’s audition were that there was conflict of interest and there was lack of independence on the part of Andersen. In this context‚ Andersen took up lucrative management consultancy projects for the clients of whom it was the auditor. From the deontological ethical perspective
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the Demise of Arthur Andersen The planning function of management is critical to the success of any organization. Innovative ideas‚ perfect products‚ and highly skilled employees fail to become assets if no plans are in place for how these assets will be used to achieve the organization’s goals. In the case of the once‚ highly successful accounting firm‚ Arthur Andersen‚ management’s failure to plan effectively for crises led to its demise. Management Planning at Arthur Andersen In today’s business
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Examining the Failure of Arthur Andersen Hester Rall LDR 531 November‚ 28 2011 Tom Melpolder Examining the Failure of Arthur Andersen Introduction Organizational Behavior (OB) is the study of an organizations individuals‚ groups and structures and its impact on workplace behavior (Yukl‚ 2010). In reviewing the failure of the storied Arthur Andersen (AA) accounting firm we see the influence of individuals’ decisions‚ particularly that of its leaders‚ but also the lack of individual accountability
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Arthur Andersen: Questionable Accounting Practices Arthur Andersen‚ one of the largest accounting firms in the United States‚ “a name that was synonymous with trust‚ integrity‚ and ethics” (Ferrell‚ Fraedrich‚ & Ferrell‚ 2011‚ p. 348)‚ through a loss of its founder Arthur Andersen‚ and change in its corporate culture resulting in many unethical business transactions that affected multitudes of primary stakeholders had to close its doors in 2002 after 90 years of business. In this report I
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perspective using cases such as: Accounting Irregularities at WorldCom and Arthur Andersen…No More: What Went Wrong? (Business Ethics 4th Ed: Cases 5 & 6 pg.101-109)‚ both clearly present various moral and ethical problems that arise that are real life business scenarios as well as question the impact of certain ‘special’ duties/obligations that apply to particular individuals and employees who choose to engage in these activities in the organization leading to their downfall. The WorldCom case and scandal
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1) What did Arthur Andersen contribute to the Enron disaster? Arthur Andersen (AA) contributed to the Enron disaster when it has failed to the management by failing to have Enron establish and enforce its own internal control. There has been flaws to AA‘s internal control. There has been assumption that AA partners were too motivated by revenue recognition thus‚ overlooking several criteria when providing their services to Enron. Additionally‚ AA also recognised the retention of audit clients
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There were several internal control issues with Arthur Andersen (AA) that contributed to the Enron disaster. Firstly‚ AA gave Enron nonaudit services as well as audit services‚ meaning that AA could advise the structuring of transactions for desired disclosure outcomes and other work and later give an audit opinion on these transactions. This resulted in a blatant conflict of interest issue that many audit professionals did not recognize. Secondly‚ the “tone at the top” of AA did not encourage ethics
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following ethical and legal standards. The purpose of this paper is to discuss the legal‚ ethical‚ and social responsibility of Arthur Andersen. This paper will also analyze three factors that influence Arthur Andersen ’s strategic‚ tactical‚ operational‚ and contingency planning. The term ethics must first be defined to understand a few of the issues involving Arthur Andersen. According to Wikipedia‚ the term Ethics is a set of principles of right conduct‚ a theory or system of moral values. When a
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