Arthur Andersen was one of the 'Big 5' accounting firms, the others being PricewaterhouseCoopers (PWC), Deloitte Touche, Ernst and Young, and KPMG. Throughout the 1980's and 1990's, these five companies provided auditing and tax services to most of the west's major companies. However, in 2002 Arthur Andersen's licences to practice as Certified Public Accountants (CPA's) in the US were voluntarily surrendered by the company in the wake of criminal charges relating to the Enron scandal. Although Arthur Andersen still technically exists as a company, and despite the verdict in relation to the criminal charges being overturned by the US Supreme Court, Arthur Andersen has arguably suffered too great a level of damage to its reputation to immediately return to its former position. Most analysts now speak of a 'Big 4' following the troubles that hit Arthur Andersen. Arthur Andersen was essentially brought down by the Enron scandal, which erupted in 2001 when it was reported by the Powers Committee, which had been appointed by Enron's board, had come to the conclusion that certain failings had been detected in Arthur Andersen's accounting services as provided to Enron. By July the following year, Arthur Andersen was found to have obstructed documents, having shredded documents related to its Enron auditing activities. The Enron scandal was one of the largest corporate disasters in the 20th century, with millions affected and billions of dollars found to have been tied up in practices that were subsequently deemed by some analysts to have been foolhardy. Until Worldcom went bankrupt in 2003, the bankruptcy of Enron was the largest bankruptcy in US corporate history. As the Enron scandal gathered pace, Arthur Andersen bosses are said to have instructed employees to shred documents ahead of an expected investigation by the Securities and Exchange Commission (SEC). Subsequently, on May 6th 2002, Arthur Andersen was charged with obstructing the proceedings of the SEX in...
References: Squires, Susan and Smith, Cynthia and McDougall, Lorna and Yeack, William. Inside Arthur Andersen: Shifting values, unexpected consequences. Upper Saddle River, Financial Times Prentice Hall, 2003.
Toffler, Barbara Ley and Reingold, Jennifer. Final accounting: pride, ambition, greed and the fall of Arthur Andersen. New York, Broadway Books, 2003.
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