Essay on Arthur Andersen: Questionable Accounting Practices

643 Words Mar 24th, 2008 3 Pages
Arthur Andersen: Questionable Accounting Practices

Arthur Andersen LLP was founded in Chicago in 1913 by Arthur Andersen and partner Clarence DeLany. After 90 years of hard work, this accounting firm we become known as one of the Big Five largest accounting firms in the United States. Andersen set standards for the accounting profession and advanced new initiatives on the strength of its then undeniable integrity. By the 1980s, standards throughout the industry fell as accountancy firms struggled to balance their commitment to audit independence against the desire to grow their consultancy practices. Andersen rapidly expanded its consultancy practice to the point where the bulk of its revenues were derived from such engagements, while
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The subsequent bankruptcy of WorldCom, which quickly surpassed Enron as the biggest bankruptcy in history, led to a domino effect of accounting and like corporate scandals that continue to tarnish American business practices. On May 31, 2005, in the case Arthur Andersen LLP v. United States, the Supreme Court of the United States unanimously reversed Andersen's conviction due to what it saw as serious flaws in the jury instructions Arthur Andersen’s ethical dilemma deals with greed. The firm became very greedy and sloppy. They no longer believed in rock solid accounting principles that had been instilled in earlier years. They were more into getting money whether illegally of legally. They felt like they were getting paid more to hide things than to audit. They tried to shred the Enron’s documents even after the court told them to stop all activities of such. Arthur Andersen somewhat helped Enron with their accounting scandal. Had Andersen done the job in an ethical manor, thousands of people would not be out of a job or even worst their retirement funds. If I was the manager of Arthur Andersen, I would not have shredded those Enron documents. Even if the company was lying they could have gotten away with it. If they stopped shredding the documents the jury would not have found them guilty and ruin their reputation. The case did get reversed but the damage was already done. To take it further back than that, I would have

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