Arthur Andersen Questionable Accounting Practices Essay

2045 Words Aug 7th, 2013 9 Pages
This paper will address and analyze the different ethical issues and the questionable accounting practices that occurred to one of the largest accounting firms in the United States. We will look and review the mandated requirements for legal compliance (from Chapter 4) and determine which requirements apply to the Arthur Anderson case. Then we will discuss how the issues with the Arthur Anderson case may have played out differently if the Sarbanes-Oxley Act had been enacted in 1999. Next we will determine and discuss which elements of the framework for ethical decision making in business (from Chapter 5) played the biggest role in the Anderson case. Explain your reasoning. Lastly, we will discuss how the situations at Arthur Anderson may …show more content…
Explain your rationale.
When reviewing the mandated requirements for legal compliance we understand that it involves these areas; regulation of competition, protection of consumers, promotion of equity and safety, protection of the natural environment and incentives to encourage organizational compliance. Looking at the first area of legal compliance we understand that is dealing with the issues that are surrounded by the impact of competition and rivalry between businesses and customers/consumers and their profits. This requirement applies to the Arthur Anderson case in so many different ways. The company main focus was to grow and obtain as many new and big cliental which compromised and ended up coming at an expense of providing quality independent audits. The company was more concerned with maintaining huge profits instead of providing the quality that it once experienced.
Laws protecting consumers also apply to the case as well. Some may agree this point, stating that it does not fit, but we disagree. The company did not understand the triple affect that their actions had on others that were associated with the company. Many different companies that lost billions of dollars also had to lay-off many workers and it also rumored many companies name and lost many consumers due to their questionable accounting practices. Putting it into perspective one effect triggers another one which falls down to others that works for the

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