This memo will discuss why Arthur Andersen was found with accounting scandal strongly tied with Enron and how Arthur Andersen failed to comply with the idea of independence to separate with the client as different parties in work, interest, and human resources.
Enron worked with Arthur Andersen closely in many different types of accounting services including internal auditing, external auditing, and consulting. With all the time being spent in Enron, Arthur Andersen was not able to differentiate the purpose of their work. Enron …show more content…
Arthur Andersen did not appear as an independent third party from their clients, and the accounting firm was also bearing a financial conflict. Being the fifth biggest certified public accounting firm in the United States, Arthur Andersen was helping companies creating fraudulent financial statements. The scandal decreases the public’s faith in security exchange once again. Congress enacting Sarbanes-Oxley with new regulations specifically for public company and registered public accounting firm to retain the public’s