Enron and Arthur Andersen

Summary assessment is a strategy to investigate and investigate every part of the business regardless of money or not. Inspectors are well prepared to identify areas of change, potential hazards, and direct fraud in the immediate vicinity. Comments can confuse the normal business flow within an organization, but the ability to find and find potential defects often exceeds the advantageous short-term misery. Within the scope of the review, the audit will be a human asset approach, operational strategy, quality or safety arrangements, and obviously bookkeeping review.

Enron's auditor, Arthur Anderson, was accused of adopting a moderate standard for auditing due to conflicts of interest with Enron's large consulting fees. In 2000, Arthur Andersen received an audit fee of $ 25 million and a consulting fee of $ 27 million. It is difficult to determine if Andersen's audit questions to Enron arise from monetary incentives to maintain the company as a consulting client, an audit client, or both. However, the amount of a mere audit fee may have a significant impact on negotiations between local partners and Enron's management team. Enron's audit fee accounts for approximately 27% of the public accounting auditing fee of Andersen's Houston office.

Anderson made a lot of contributions to Enron disaster. Arthur Andersen approved the structure of the Human Special Purpose Entity (SPE) which was used to create false profits, hide losses and continue to fund Enron's consolidated financial statements. In addition, AA does not comply with General Accounting Principles (GAAP). In addition, the AA did not recommend Enron's Audit Committee that if their profits were achieved their CFOs and their colleagues would also be involved in major conflicts. They did not make recommendations to the Enron Audit Committee on Enron's policy and the lack of internal control. In addition, many transactions between Enron and special purpose entities are not due to the interests of Enron's shareholders. At the same time, AA did not consider quality management partner's recommendation. In addition, Arthur Andersen failed to find significant audit evidence and / or did not act on evidence of numerous violations found.

Answer please. As an advisor and auditor of Enron, Andersen is responsible for pointing out Erron 's false approach, and if Enron did not comply, Andersen is responsible for publishing these issues with higher authority or generally. To protect stakeholders and shareholders' rights. However, Enron 's annual membership fee for Andersen seems to be a convincing factor, "the present situation" does not change. Arthur Andersen not only allowed Enron to continue to manipulate its accounting data, but also discarded documents that provided sufficient evidence for Enron's mistakes. Therefore, it also protects Eron 's evil practices.