Texas And Enron Essay
Journal of Finance and Accountancy
Arthur Anderson Auditors and Enron: What happened to their
Texas CPA licenses?
Daniel Edelman
Texas A&M University-Commerce
Ashley Nicholson
Texas A&M University-Commerce
ABSTRACT
This article examines Arthur Andersen, its role with Enron, and what happened to some of its key players. The demise of Arthur Andersen and Enron was significant. Thousands of people lost their jobs and investments. As a result, new laws for publicly traded companies and auditing firms followed. Auditing firms and Certified Public Accountants (CPA) are licensed and disciplined by each state where audits or work is performed. Enron’s headquarters and many of the allegations against Arthur Anderson occurred in Texas and under the …show more content…
The partners split in 1918 and the firm became Arthur Andersen. Mr. Andersen was a man with a mission; he wanted to create an organization that was more than “just another accounting firm,” but to be honest and to “think straight and talk straight”, a phrase Mr. Andersen learned in childhood (Carnegie, 2005).
His death in 1947, and succession by Leonard Spacek, led to a period of very successful times for the firm. The first international office was opened in the 1950s, with revenues around $8 million and in the late 1970s, with revenues around $130 million (Goff, 2002). The number of partners at the firm surpassed 1,000 people. When the firm’s successful consulting division split from Arthur Andersen, renaming itself Accenture, the top accounting firm emerged from the deal as number five and with a focus more on its audit services. During these high times, the firm engaged Enron as a client, in 1986. Andersen provided Enron, through the years, with external and internal auditing, as well as consulting services. Little did many know that this 16 year relationship would become the demise of the firm and its client, …show more content…
Retrieved February 26, 2008, from http://www.tsbpa.state.tx.us/general/enron-case.html
Arthur Anderson Auditor’s, Page 8
Journal of Finance and Accountancy
Texas State Board of Public Accountancy. (2008, November). The Texas State Board Report.
Volume 97, 8. Retrieved February 27, 2009 from http://www.tsbpa.state.tx.us/pdffiles/br0811.pdf Thomas, C. William. (2002, January). The rise and fall of Enron. Journal of Accountancy,
Online. Retrieved April 24, 2008, from http://www.aicpa.org/pubs/jofa/apr2002/thomas.htm U.S. Securities Exchange Commission, Litigation Release No. 20441. (2008, January 28). David
B. Duncan, Global Engagement Partner for Enron Audits, Consents to Antifraud
Permanent Injunction and Permanent Suspension from Appearance or Practice before
Commission. Retrieved February 5, 2008, from http://www.sec.gov/litigation/litreleases/2008/lr20441.htm U.S. Securities Exchange Commission, News Digest Issue 2008-18. (2008, January 28).
Commission Files Settled Actions Against Four Former Arthur Andersen Partners in
Connection With the Audits of Enron 's Financial Statements. Retrieved February 5, 2008, from http://www.sec.gov/news/digest/2008/dig012808.htm
Arthur Anderson Auditor’s, Page
Arthur Anderson Auditors and Enron: What happened to their
Texas CPA licenses?
Daniel Edelman
Texas A&M University-Commerce
Ashley Nicholson
Texas A&M University-Commerce
ABSTRACT
This article examines Arthur Andersen, its role with Enron, and what happened to some of its key players. The demise of Arthur Andersen and Enron was significant. Thousands of people lost their jobs and investments. As a result, new laws for publicly traded companies and auditing firms followed. Auditing firms and Certified Public Accountants (CPA) are licensed and disciplined by each state where audits or work is performed. Enron’s headquarters and many of the allegations against Arthur Anderson occurred in Texas and under the …show more content…
The partners split in 1918 and the firm became Arthur Andersen. Mr. Andersen was a man with a mission; he wanted to create an organization that was more than “just another accounting firm,” but to be honest and to “think straight and talk straight”, a phrase Mr. Andersen learned in childhood (Carnegie, 2005).
His death in 1947, and succession by Leonard Spacek, led to a period of very successful times for the firm. The first international office was opened in the 1950s, with revenues around $8 million and in the late 1970s, with revenues around $130 million (Goff, 2002). The number of partners at the firm surpassed 1,000 people. When the firm’s successful consulting division split from Arthur Andersen, renaming itself Accenture, the top accounting firm emerged from the deal as number five and with a focus more on its audit services. During these high times, the firm engaged Enron as a client, in 1986. Andersen provided Enron, through the years, with external and internal auditing, as well as consulting services. Little did many know that this 16 year relationship would become the demise of the firm and its client, …show more content…
Retrieved February 26, 2008, from http://www.tsbpa.state.tx.us/general/enron-case.html
Arthur Anderson Auditor’s, Page 8
Journal of Finance and Accountancy
Texas State Board of Public Accountancy. (2008, November). The Texas State Board Report.
Volume 97, 8. Retrieved February 27, 2009 from http://www.tsbpa.state.tx.us/pdffiles/br0811.pdf Thomas, C. William. (2002, January). The rise and fall of Enron. Journal of Accountancy,
Online. Retrieved April 24, 2008, from http://www.aicpa.org/pubs/jofa/apr2002/thomas.htm U.S. Securities Exchange Commission, Litigation Release No. 20441. (2008, January 28). David
B. Duncan, Global Engagement Partner for Enron Audits, Consents to Antifraud
Permanent Injunction and Permanent Suspension from Appearance or Practice before
Commission. Retrieved February 5, 2008, from http://www.sec.gov/litigation/litreleases/2008/lr20441.htm U.S. Securities Exchange Commission, News Digest Issue 2008-18. (2008, January 28).
Commission Files Settled Actions Against Four Former Arthur Andersen Partners in
Connection With the Audits of Enron 's Financial Statements. Retrieved February 5, 2008, from http://www.sec.gov/news/digest/2008/dig012808.htm
Arthur Anderson Auditor’s, Page