The Rise and Fall of Arthur Andersen

One month after Twin Towers collapsed in New York City, the focus of the country turned into an Enron incident. Nearly every day, the names of Kenneth Lay and Jeffery Skilling are in the media. Enron applied for bankruptcy, and thousands of people lost work and pensions. Another company involved in the scandal is Accounting firm Arthur Andersen, Enron is their client. Even after the US Securities and Exchange Commission warned, Arthur Andersen continued a bad audit. If the employees of Arthur Andersen are morally ethical, after the warning the Enron scandal will not lead to the conviction and dissolution of Arthur Andersen.

In the conclusion of a famous criminal action against Andersen Chartered Accountant after the collapse of Enron, the Supreme Court reversed Arthur Andersen's criminal trial that was committed before the SEC's subpoena was received. The judgment court concluded that the judge's instructions by the judge were based on the basic elements of the scientist's actual understanding of the case (as opposed to the "reasonable prospects" criteria in civil lawsuits) and the intention to intervene in the case He decided to ignore.

If you do not discuss the participation of Enron's accountant Arthur Anderson, the discussion of the Enron scandal will not be complete. Arthur Andersen was one of the many reasons Enron collapsed when conflicts of interest arise between the two roles of Enron as a corporate auditor and consultant. Enron 's Chief Financial Officer Andrew Fastow promotes many transactions and he has vested interests in both parties to this transaction. By creating these transactions and intentionally participating, he placed responsibility for the position of the company above his own financial needs. According to a 2000 report by Paul and Palepu (2003), Arthur Andersen received an audit fee of $ 25 million and a consulting fee of $ 27 million, which are based on the public customer audit fee at the Arthur Andersen Houston office Accounting for about 27%. Anderson was also responsible for a part of Enron 's internal accounting, and some of Anderson' s employees eventually left Enron 's job.