Arthur Andersen The name Arthur Andersen is a very well known name among households in the world today. At one time‚ the reputation of Arthur Andersen was very positive. However‚ the risky and unethical decisions that were made over the ending years by top management‚ gave Arthur Andersen a famous name with not such a positive reputation. Arthur Andersen became involved in many scandals with the largest being that of Enron Incorporated. Poor decision making by upper management and issues with
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led to non-existent company profits; ultimately misleading investors to become shareholders of what they thought were “good companies”. Arthur Andersen LLP was one of the “Big Five” accounting firms before having to surrender its licenses to practice as Certified Public Accountants in 2002; due to an accumulation of criminal charges (CNN Money). Arthur Andersen was in charge for the accounting records of several companies including Enron‚ WorldCom‚ and Waste Management. By early 2002‚ they had been
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1. For nearly 90 years‚ Andersen had a culture of doing the right thing. Moral courage defined the organization. However‚ there was a gradual erosion of the culture. Name three cultural changes that contributed to Andersen’s problems and defend your position. The first cultural change was that Andersen embarked on a path that valued consulting service which charged hefty fees ahead of auditing in 1990s. Compared to its original major service‚ auditing that required accountants to insist independence
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Unethical Practices of Arthur Andersen - Week 2 - CheckPoint: 1. What did Arthur Andersen contribute to the Enron Disaster? Arthur Andersen contributed a lot to the Enron Disaster. Arthur Andersen approved the structure of man Special Purpose Entities (SPE) that were used to generate false profits‚ hide losses‚ and to keep financing off Enron’s consolidated financial statements. Also‚ AA failed to abide by the Generally Accepted Accounting Principle (GAAP). In addition‚ AA did not
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ARTHUR ANDERSEN LLP CASE STUDY DUE: Sunday‚ May 12‚ 11:59pm 1. Discuss the environment‚ strategic‚ and organizational changes that occurred over the life of Andersen in the context of figure 11.1. 2. Evaluate Andersen’s claim that their problems on the Enron audit were due to a few “bad partners” in the organization. If you disagree with this claim‚ discuss what you think were the root causes of the problem. 3. Suppose you were Andersen’s managing partner in the early 1990s. Would
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1. What did Arthur Anderson contribute to the Enron disaster? Arthur Andersen (AA) contributed to the Enron disaster when AA consulting became its own separate entity‚ named Accenture. Revenues from consulting services surpassed revenue from auditing services. A natural competitiveness grew between the two rivals and this is where the problems began to start. Management held maximinizing revenues as their primary focus of success and promotions/bonuses were based on this factor. The CEO of AA‚ Joe
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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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Overview In order “to offer high-quality accounting services”‚ Arthur Andersen (AA)‚ a Northwestern accounting professor started a business to offer services to clients promoting “integrity and sound audit opinions over higher short-run profits”. The company’s “four cornerstones” was good service‚ quality audits‚ well-managed staff‚ and profits for the firm. Their strategy was to focus on quality and high standards of audits rather than profits‚ a very successful strategy that led to consistent
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1. For many years‚ strategy and environment of Arthur Andersen changed especially with regards to the materials. The management of Andersen’s businesses reacted to the changing environment by making the related changes to the organizational architectures such as performance evaluation‚ decision right and reward systems. In the book‚ it is revealed that poorly designed organizations architecture in response to the changing environment in term of material can result into company’s underperformance
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1.Arthur Andersen contributed to the Enron disaster by shredding documents‚ which was obstruction of justice‚ by allowing the person in charge of the Enron account to overrule the quality control partner‚ by being revenue focused and by not standing up to its clients‚ and by not changing their internal control policies. 3. The prime motivation behind the decisions of Arthur Andersen’s audit partners on the Enron audits was not for the public interest but for profit and fear of losing clients.
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