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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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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Note Arthur Andersen: Shredding the Reputation and Viability of a Once Venerable Accounting Firm |CASE SUMMARY | Four days before the high-flying‚ energy-trading giant‚ Enron‚ disclosed a $618 million loss for the third quarter of 2001‚ an attorney for Arthur Andersen‚ the accounting firm that audited Enron’s books‚ wrote a memo to Andersen employees
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economics Professor Arthur Andersen started the accounting firm Arthur Andersen & Co. Arthur Andersen as an accounting firm to offer certification for corporate balance sheets 1. Arthur Andersen & Co. created an initial setup of the consulting unit when it formed the Administrative Accounting group in 1942. The Administrative Accounting main tasks were developing systems related to accounting ‚ and different methods and procedures for Arthur Andersen clients. In the 1950s‚ Arthur Andersen starts giving
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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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organizational architecture. Business environment of Andersen includes technology that was used effectively; structure of its markets‚ regulations which helped Andersen to grow along with its reputation. The second category is strategy which includes Andersen’s primary goals‚ choice of business‚ and services. Finally‚ the last category is organizational architecture which explains how authority is distributed among Andersen’s employees‚ and how rewards determined (Brickley et al‚ 2009). Introduction
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Arthur Andersen was one of the ’Big 5 ’ accounting firms‚ the others being PricewaterhouseCoopers (PWC)‚ Deloitte Touche‚ Ernst and Young‚ and KPMG. Throughout the 1980 ’s and 1990 ’s‚ these five companies provided auditing and tax services to most of the west ’s major companies. However‚ in 2002 Arthur Andersen ’s licences to practice as Certified Public Accountants (CPA ’s) in the US were voluntarily surrendered by the company in the wake of criminal charges relating to the Enron scandal. Although
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and 4 1. Arthur Anderson’s audit partners’ sole concern was how much revenue could be generated‚ so the employees of Arthur Anderson paid little mind to the quality of the audits they did as long as they were making money. They turned their heads when generally accepted accounting principles were not being followed and hid the fact that Enron’s policies and internal controls were not good enough to protect its shareholders. 3. The prime motivation behind the decisions of Arthur Andersen’s
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AND ITS ROLE IN THE DOWNFALL Corporate Culture and its Role in the Downfall Of Arthur Anderson LLC and Sunbeam Corporation Darrell V. Davis Grand Canyon University Bus 604 Business Ethics July 5‚ 2009 Abstract Corporate culture plays an extremely important role in the development of a company. Whether explicitly stated or not‚ the culture of a company reveals its attitude‚ motivation‚ and intentions. Arthur Andersen’s and Sunbeam’s cultures revealed that they were on the hunt for huge profits
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Anderson realized that they could not survive with the current‚ traditional business approach and their competitive edge was dwindling‚ they switched from a "pillar of integrity" company to one that focused solely on keeping clients at any cost. Andersen was too fee-driven. For example‚ hard selling of services (particularly consultants tagging along on audits) that the clients did not need and giving results of both auditing and consulting‚ supported by the client’s goals. Resistance to change
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