Andersen's Case Auditing and Assurance Services
Arthur Andersen was one of the five biggest accounting firms in United States. Arthur Andersen is specific example about the most recent business collapse, which is considered profound in American business history. The firm, practicing in more than 80 countries with thousands of employees, now lost its reputation as an audit and accounting firm. There are many different thoughts and judgments about the case when Arthur Anderson failed its tasks to detect fraudulent financial activities on Enron and several different companies.
The Enron Company filed bankruptcy in December of 2001.Being well known as a big energy company which headquarters is located in Houston, the bankruptcy of the company drew lots off attentions from business world. Questions were asked and lots of financial misstatements were revealed and Arthur Andersen – Enron’s external auditing and accounting firm in Houston, was involved. Stephens (2002) stated, Arthur Andersen who were responsible for managing Enron’s audits, had illegally destroyed paper and electronic documents related to their representation of Enron (p.24). The case soon went to the jury. Louwers et al. (2011) reported the instructions hinged on the wording of statue that makes it a crime to knowingly use intimidation or physical force, threaten, or corruptly persuade other person. According to Oxford Dictionaries online, corrupt means having or showing a willingness to act dishonestly in return for money or personal gain. In this case, the word “corrupt” was not applied appropriately to the actions of Anderson. There was no evidence to prove that there is a person who is corrupt persuader. Who was the one that acted dishonestly? The court also needs to identify the personal gain that a corrupt persuader can gain from having such action. The court could not find the answers to this issue, which means the decision is attached to the firm’s fate – Arthur Andersen. Research by Stephens (2002) states that to clarify the instruction of
The Enron Company filed bankruptcy in December of 2001.Being well known as a big energy company which headquarters is located in Houston, the bankruptcy of the company drew lots off attentions from business world. Questions were asked and lots of financial misstatements were revealed and Arthur Andersen – Enron’s external auditing and accounting firm in Houston, was involved. Stephens (2002) stated, Arthur Andersen who were responsible for managing Enron’s audits, had illegally destroyed paper and electronic documents related to their representation of Enron (p.24). The case soon went to the jury. Louwers et al. (2011) reported the instructions hinged on the wording of statue that makes it a crime to knowingly use intimidation or physical force, threaten, or corruptly persuade other person. According to Oxford Dictionaries online, corrupt means having or showing a willingness to act dishonestly in return for money or personal gain. In this case, the word “corrupt” was not applied appropriately to the actions of Anderson. There was no evidence to prove that there is a person who is corrupt persuader. Who was the one that acted dishonestly? The court also needs to identify the personal gain that a corrupt persuader can gain from having such action. The court could not find the answers to this issue, which means the decision is attached to the firm’s fate – Arthur Andersen. Research by Stephens (2002) states that to clarify the instruction of