Arthur Andersen Case - 2216 Words

Overview In order â€Å"to offer high-quality accounting services†, Arthur Andersen (AA), a Northwestern accounting professor started a business to offer services to clients promoting â€Å"integrity and sound audit opinions over higher short-run profits†. The company’s â€Å"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 growth over the years. Environmental, strategic, and organizational changes In designing the optimal architecture for a given firm, market conditions, technology, and government regulation should be taken into consideration as these are†¦show more content†¦This was not the only crisis that AA was involved in which made outsiders questioned their practices and overlook their claim. There were lawsuits against Arthur Andersen. Prior to the Enron scandal AA had settled a dispute with the Securities and Exchange Commission paying more than $7 million for accounting and auditing work of Waste Management Corporation. Additionally, the SEC sued an Andersen lead partner on the Sunbeam Corporation audit. These crises along with their claim that their problem with the Enron audit was due to a few â€Å"bad partners† was merely the result of an unsound organizational structure along with policies and practices that the firm implemented. The unsound organizational structure of Arthur Andersen changed the motivation of employees within the firm and changes within the firm over the years one of which was the compensation of partners did not allow for integrity when work was being done for these public companies. What could have been done differently? The organizational architecture of Arthur Andersen seemed to have gone a different route from what it was intended for and much of the success that Arthur Andersen was short term and partner based. Policies that were implemented led partners to engage in mischievous acts to gain more business. Slowly their policies and practices became more about money rather thanShow MoreRelatedArthur Andersen Case2098 Words   |  9 Pages1. 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, JoeRead MoreArthur Andersen And Enron Case Essay983 Words   |  4 Pages 1.What was the case about? (Summary of the Case) The case is about Arthur Andersen s role in accounting fraud at Enron which was one of its major clients. The criminal charges faced by the firm in the Enron case and how the Enron case eventually led to the closure of Arthur Andersen company. The company was convicted in 2002 of one count of obstruction of justice because of its role in Enron’s auditing. After the conviction, the firm could no longer provide public accounting services. On JuneRead MoreArthur Andersen s Enron Case918 Words   |  4 Pages The case is about Arthur Andersen s role in accounting fraud at Enron; Enron was one of its Arthur Andersen major clients. The criminal charges faced by Andersen in the Enron case and how the case eventually led to the closure of the company. It was convicted in 2002 of one count of obstruction of justice because of its role in Enron’s auditing. After the conviction, the firm could no longer provide public accounting services. On June 15, 2002, Arthur Andersen was convicted of obstruction ofRead MoreCapstone Case Study – Arthur Andersen LLP Essay1871 Words   |  8 Pagesï » ¿Individual Project Capstone Case Study – Arthur Andersen LLP Bus 680 – Economics for Business Decisions Summer 2013 1. Discuss the environmental, strategic and organizational changes that occurred over the life of Andersen in the context of figure 11.1. While Andersen started off as a stable environment, once changes started being made to the main focus of the company many changes were expedited. While still successful in it’s auditing business, other opportunities arose that allowed for quickerRead MoreCase Analysis Arthur Andersen: Questionable Accounting Practices1000 Words   |  4 PagesCase Analysis Arthur Andersen: Questionable Accounting Practices ââ€" 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 aRead MoreCase Study of Arthur Andersen1399 Words   |  6 PagesBusiness Ethics Decision-Making Cases Write-ups Arthur Andersen: Questionable Accounting Practices Name: Wen Jiangshan Student ID:2011008274 Part I. 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It marketed natural gas liquidsRead MoreCase Analysis Arthur Andersen: Questionable Accounting Practices1012 Words   |  5 PagesCase Analysis Arthur Andersen: Questionable Accounting Practices ââ€" 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 sccessfulRead MoreEnron Scandal Of Enron Corporation Essay1145 Words   |  5 PagesIntroduction Enron scandal which aroused in 2001 was one of the most famous events in the area of fraud audit. As the auditor company of Enron, Arthur Andersen failed to prepare true and fair auditing reports. They both suffered lethal loss at that time. The following paragraphs will discuss this fraud event, including the organization history, the organization’s event, the fraud issue in the event, the consequence of the main stakeholders, auditors in the event and their roles, and the current situationRead MoreManagement Planning Paper on Arthur Andersen1221 Words   |  5 PagesRunning head: Management Planning Paper on Arthur Andersen Management Planning Paper on Arthur Andersen In 1913, the company Arthur Andersen started by Arthur Andersen and Clarence Delany by the name of Andersen, Delany, Co. In 1918, it was given the name Arthur Andersen Co. The company supplied tax, consulting services and auditing for the large business, and itself had a position in the Big Five accounting firms. In 2002, this firm was found guilty for auditing an energy corporation