Case Study of Arthur Andersen Essay

1421 Words Jun 7th, 2012 6 Pages
Business Ethics Decision-Making Cases Write-ups

Arthur Andersen:
Questionable Accounting Practices

Name: Wen Jiangshan
Student ID:2011008274

Part I. Summary of the case
Case 2 mainly introduces how Arthur Andersen, who used to be one of the “Big Five” largest accounting firms in the United States, strayed away from accepted policies and stuck in a string of accounting scandals, finally closed its doors after 90 years of business. The firm’s name was synonymous with trust, integrity and ethics during a long period of time, however, Andersen failed to withstand the pressure from the competition of consulting service. Thus, it leaded to a negative influence on Andersen's corporate culture, which enabled
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ting procedures bordering on |Was forced to restate five years’ worth of |
| | |fraud perpetrated throughout the 1990s |financial statements accounting for $586 |
| |Enron | |million in losses |
| | | |Bankruptcy |
|4 | | | |
| | |Destroyed a number of documents concerning its|Was founded guilty of obstruction of justice |
| |Arthur |auditing of Enron |Agreed to stop auditing public companies by |
| |Andersen | |August 31,2002 |
| | |Had improperly accounted for nearly $3.9 | |
| |WorldCom |billion of expenses and had overstated |Bankruptcy in 2003 |
|5 | |earnings in 2001 and 2002 | |
| |Arthur Andersen |Failed to find the accounting irregularities |$6.5 billion

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