Rise & Fall of Arthur Andersen, LLP
March 4, 2014
Rise & Fall of Arthur Andersen, LLP
Abstract
Enron was a natural gas company that was formed in 1985 by Kenneth Lay. By 1992, Enron was the largest selling company of natural gas in North America. In October 2001 a scandal involving Enron was emerging. This scandal led to the fall of the company. The Enron case and many others cases led to the collapse of other companies that did business with them which included one of the largest accounting firms in Chicago; the accounting firm of Arthur Andersen.
This paper will discuss the rise and fall of one of Chicago’s top accounting firm and how greed and dishonesty can destroy and company and a good reputation. (Newman, 2005)
In the beginning
Arthur Andersen, LLP, had become a holding firm based out of the city of Chicago and was formally one of the top five accounting companies that provided auditing, tax and consulting services to a number of large corporations for many years. Arthur Andersen started this company in 1913 along with his partner Clarence DeLany. Arthur Anderson was born May 30, 1885, in
Illinois, the son of Norwegian immigrants. Andersen’s mother had schooled him in a Scandinavian axiom “Think straight, talk straight”. At the age of 16 he took a job as a mail boy where he worked during the day and attended school at night. He was later hired to be an assistant to the controller at a company called Allis-Chalmers in Chicago. By 1908 at the age of only 23 years old Andersen had worked his way up to being the youngest CPA in Illinois. (Washington Post, 2002)
In 1913, Arthur Andersen along with Clarence DeLany, both from Price Waterhouse bought out a California company called The Audit Company and formed their own firm called
Andersen, DeLany & Company. In 1918 Clarence DeLany left the company and Arthur
Andersen had the company changed its name to Arthur Andersen &
Rise & Fall of Arthur Andersen, LLP
Abstract
Enron was a natural gas company that was formed in 1985 by Kenneth Lay. By 1992, Enron was the largest selling company of natural gas in North America. In October 2001 a scandal involving Enron was emerging. This scandal led to the fall of the company. The Enron case and many others cases led to the collapse of other companies that did business with them which included one of the largest accounting firms in Chicago; the accounting firm of Arthur Andersen.
This paper will discuss the rise and fall of one of Chicago’s top accounting firm and how greed and dishonesty can destroy and company and a good reputation. (Newman, 2005)
In the beginning
Arthur Andersen, LLP, had become a holding firm based out of the city of Chicago and was formally one of the top five accounting companies that provided auditing, tax and consulting services to a number of large corporations for many years. Arthur Andersen started this company in 1913 along with his partner Clarence DeLany. Arthur Anderson was born May 30, 1885, in
Illinois, the son of Norwegian immigrants. Andersen’s mother had schooled him in a Scandinavian axiom “Think straight, talk straight”. At the age of 16 he took a job as a mail boy where he worked during the day and attended school at night. He was later hired to be an assistant to the controller at a company called Allis-Chalmers in Chicago. By 1908 at the age of only 23 years old Andersen had worked his way up to being the youngest CPA in Illinois. (Washington Post, 2002)
In 1913, Arthur Andersen along with Clarence DeLany, both from Price Waterhouse bought out a California company called The Audit Company and formed their own firm called
Andersen, DeLany & Company. In 1918 Clarence DeLany left the company and Arthur
Andersen had the company changed its name to Arthur Andersen &
Bibliography: Andersen 's Collapse May Be Boon to Survivors; Industry Officials Predict More Clients, Higher Fees for Remaining Big Accounting Firms. (2002, August 24). The Washington Post, p. 1. Andersen at the center of Enron scandal.. (2002, January 20). Chicago tribune, p. 1. Demise of Andersen Hurts Prospects for Accounting Students Nationwide.. (2002, November 2). Knight Ridder/Tribune Business News, p. 1. "Main St. loses trust in Wall St. Enron 's fall and accounting scandals drive investors away from stock market.(USA)." The Christian Science Monitor 25 Feb. 2002: 1. Print. Neuman, E. J. (2005). The Impact Of The Enron Accounting Scandal On Impressions Of Managerial Control.. Academy of Management Annual Meeting Proceedings, 8(1), S1-S6. The Fall of Anderson. Chicago Tribune. (2002, September 1)