...Noel | Kjeseth, Mitchell | Tran, Dung | Vo, Duong “Lucy” | Walden, Giovanna | Wang, Yang | White, Cassi Noel | Kjeseth, Mitchell | Overview Before becoming Accenture, Andersen Consulting was a new branch of Andersen Accounting in 1989. Andersen Consulting faced a difficult task of positioning itself in the information technology marketing while also forging an identity separate from its accounting heritage. The challenge was to retain the positive aspects of the brand equity and break away from the limitations associated with an accounting brand. Originally, Andersen Consulting did not offer innovative solutions, which caused it difficulty in establishing a presence in the technology world. With its expertise in marketing and communications, Andersen Consulting quickly set apart from its competitors like IBM or McKinsey. It used sophisticated marketing strategies and advertising campaign for its name position and image. Eventually, this led Andersen to become the world’s largest management and technology-consulting firm. After a while, Andersen Consulting decided to seek independence as a separate company from Arthur Andersen. It was granted its independence in 2000, but as part of the ruling granting its independence, the license to use the Andersen Consulting name was to expire December 31 2000. After spending $7 billion in building the brand over many years, it now had to find, implement, and introduce to the world a new name in a matter of months...
Words: 2751 - Pages: 12
...provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments of its supply chain. BPO is typically categorized into back office outsourcing - which includes internal business functions such as human resources or finance and accounting, and front office outsourcing - which includes customer-related services such as contact center services. BPO that is contracted outside a company's country is called offshore outsourcing. BPO that is contracted to a company's neighboring (or nearby) country is called near shore outsourcing. Often the business processes are information technology-based, and are referred to as ITES-BPO, where ITES stands for Information Technology Enabled Service. Knowledge process outsourcing (KPO) and legal process outsourcing (LPO) are some of the sub-segments of business process outsourcing industry. In 2010, the Philippines surpassed India as the largest business process outsourcing industry in the world. After growing 20 per cent in 2012, the BPO industry of the Philippines is estimated to gross revenue of upwards to $25 billion by 2016. By these estimates, the Philippines' BPO industry will account for approximately 10 per cent of the nation's GDP. History Outsourcing is one such abstracted term that has, over time, amassed considerable positive momentum as well as negative baggage. Outsourcing has been around since the time of the hunters and gatherers. Those who were strong hunters hunted and those...
Words: 5948 - Pages: 24
...Consortium (UHC). This event exacerbated the need for an unprecedented volume of R/3 transactions. Although, prior to the contract, testing seemed to indicate that R/3 on HP9000 servers would be able to cope with the volume of transactions, in 1994 R/3 could process only 10,000 customer orders per night, compared with 420,000 under FoxMeyer's original mainframe system (Jesitus 1997). Third, the execution of the project was an issue due to the shortage of skilled and knowledgeable personnel. FoxMeyer did not have the necessary skills in-house and was relying on Andersen Consulting to implement R/3 and integrate the ERP with an automated warehouse system from Pinnacle. Although at the height of the project there were over 50 consultants at FoxMeyer, many of them were inexperienced and turnover was high (Computergram International 1998). Finally, the environment quadrant of the risk framework includes issues over which project management has little or no control (Keil, Cule, Lyytinen and Schmidt 1998). Although FoxMeyer must have realized the...
Words: 2060 - Pages: 9
...Consortium (UHC). This event exacerbated the need for an unprecedented volume of R/3 transactions. Although, prior to the contract, testing seemed to indicate that R/3 on HP9000 servers would be able to cope with the volume of transactions, in 1994 R/3 could process only 10,000 customer orders per night, compared with 420,000 under FoxMeyer's original mainframe system (Jesitus 1997). Third, the execution of the project was an issue due to the shortage of skilled and knowledgeable personnel. FoxMeyer did not have the necessary skills in-house and was relying on Andersen Consulting to implement R/3 and integrate the ERP with an automated warehouse system from Pinnacle. Although at the height of the project there were over 50 consultants at FoxMeyer, many of them were inexperienced and turnover was high (Computergram International 1998). Finally, the environment quadrant of the risk framework includes issues over which project management has little or no control (Keil, Cule, Lyytinen and Schmidt 1998). Although FoxMeyer must have realized the...
Words: 2060 - Pages: 9
...1 ACCENTURE: REBRANDING AND REPOSITIONING A GLOBAL POWER BRAND1 INTRODUCTION Andersen Consulting was established in 1989 when the consulting practice of the accounting firm Arthur Andersen separated to form an independent business unit. Andersen Consulting faced the extremely difficult task of positioning itself in the Information Technology market space while simultaneously forging a separate identity from its accounting heritage. The business challenge was to retain the positive aspects of the brand equity developed over decades as Arthur Andersen, yet break away from the limitations associated with an accounting brand. What was notable was that before its inception, Andersen Consulting was generating almost $1 billion annually in revenue, yet wasn’t well known in the information technology marketplace. And to those who did know them, they were often thought of accountants, and not up to the task of delivering innovative technology solutions. In order to bridge this gap, Andersen Consulting used extensive market research to create a brand and naming strategy that would establish immediate credibility in the “consulting” arena, while at the same time leveraging all of the positive aspects with the Arthur Andersen brand. Market research also helped form the strategy for successfully launching the new name and positioning. In order to build a new identity, Andersen Consulting set a groundbreaking precedent by using sophisticated marketing strategies coupled with the professional...
Words: 13556 - Pages: 55
...reporting, respectively. They instituted accounting practices that they knew pushed the envelope of, if not legality, acceptability. In fact, they were bedfellows in Sunbeams accounting methods. With each of the company’s histories, they had the resources to make better decisions regarding their actions. Yet, it appears they ignored their responsibility to the public in order to garner the highest gain. Arthur Andersen LLP Arthur Andersen LLP, with its ninety year history, for a long while stood as one of the most well respected, influential, high-earning, and ethical accounting firms in the world. Yet, with the rise of its consulting services, several apparent oversights, the demise of a number of its clients, and questions of the firms relationships with clients; the company came under attack from investors of its clients, regulators, and courts. Without a valid defense, based simply on its profession and who the company was suppose to defend, Andersen found itself answering tough questions and paying millions of dollars in restitution. The result was that Andersen was forced to cease auditing public companies and to end its long history as a well respected accounting practice. There are several legal and ethical issues surrounding...
Words: 3062 - Pages: 13
...7. A perceived lack of integrity caused irreparable damage to both Andersen and Enron. How can you apply the principles learned in this case personally? Generate an example of how involvement in unethical or illegal activities, or even the appearance of such involvement, might adversely affect your career. What are the possible consequences when others question your integrity? What can you do to preserve your reputation throughout your career? A perceived, or even likely more detrimental to one’s career, a proven lack of integrity, can cause damage to a career in many ways. Integrity is an important foundation in client and employee/employer relationships. Integrity equates to placing trust in an individual that he or she will conduct themselves with ethical and moral standards. Studying the damage caused to Andersen and Enron is a good example to conduct oneself with a high standard and not engage in activities at our outside of work which would cause someone to question your integrity as well as the trust relationship. An example of involvement in unethical or illegal activities, or the appearance of involvement which may adversely affect your career, would be participation in gambling. While this activity is legal in some states and venues, this activity could be extrapolated to one’s personality which could go against the moral of integrity of clients or supervisors. Since this is a perceived negative activity, a client or employer might wonder what risks of integrity...
Words: 1069 - Pages: 5
...The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron The tale of Enron is a story of human weakness, of hubris and greed and rampant self-delusion; of ambition run amok; of a grand experiment in the deregulated world; of a business model that didn’t work; and of smart people who believed their next gamble would cover their last disaster—and who couldn’t admit they were wrong.1 Once one of the country’s foremost companies in regards to earnings, innovation, and reputation, Enron seemed to have it all. No one would have ever suspected that the company was billions of dollars in debt. Those at the top frequently assured everyone that all was well. No one thought to look any further. And therein lies the problem… While there is an endless list of things that could have altered the path Enron was on, I am only going to touch on a few of my recommendations. First of all, the corporate culture of Enron was a breeding ground for greed and immoral actions. Employees were rewarded for the money they brought in, no matter how it was made. They were encouraged to use unsavory ways to drive the price of their product up, no matter the cost to the consumer. They exploited their customers time and time again in the name of good business. This all stemmed from the “tone at the top.”2 “Tone at the top is a level of commitment to integrity, to doing the right thing at all costs despite the consequences such action may have on financial performance. Actions...
Words: 2284 - Pages: 10
...EXECUTIVE SUMMARY This paper investigates about the Enron Corporation and Arthur Anderson. This assignment is to identify the background of Enron and Arthur Anderson and Enron fail. Other than that, identify the business risks that faced by Enron. Moreover, determine the responsibilities of board of directors and steps to improve corporate governance. Besides that, differentiated between rules-based accounting and principle-based accounting and the uses. In addition, there are discussion about auditor should allowed to provide non-audit services. There are also critical discussion on the reason audit partners struggle with making tough accounting decisions and a good recommendation of changes to be made. 1.0 Background of Enron Corporation and Arthur Anderson and fall Of Enron. 1.1 Background of Enron Corporation Enron was established in the middle of a recession in 1985, when Kenneth Lay CEO of Houston Natural Gas Company (HNG), persuaded a joining among Inter North Incorporate (Peterson). There was a young consultant named Jeffrey Skilling who had a background in banking organization (Peterson). He planned an innovative solution for Enron profit in the natural gas business (Sridharan, Dickes, & Caines). For instance, Enron buy natural gas from suppliers and sell to customers with the higher price (Sridharan, Dickes, & Caines). It is because the demand of natural gas increased (Peterson). Kenneth Lay was very impressed with Skilling’s new solution in 1990 and...
Words: 3208 - Pages: 13
... Three prominent SPEs, used by Enron, were known as “Chewco,” “LJM2,” and “Whitewing.” Enron had issues related to corporate governance. Enron’s audit committee only met a couple of times a year and covered numerous topics in a short period of time. The audit committee also lacked the technical knowledge needed to understand auditor questions, the financial statements, and the complicated transactions used by management (Healy and Palepu). As a result, Enron was able to hide its fraudulent activity from the audit committee with ease. Another issue with corporate governance is the role of the auditors. Arthur Andersen was accused of conducting less than adequate audits due to a conflict of interest; they collected over $50 million in audit and consulting fees from Enron in 2000 (Healy and Palepu). Essentially, Arthur Andersen looked the other way as Enron continued to lie to investors. Enron, like most companies, had to deal with outside pressures such as meeting earnings expectations. Not meeting earnings expectations will cause the stock price to drop. Enron met these expectations by managing its earnings, which increased their stock price. As a result, Management received large bonuses and the value of their stock options skyrocketed. Like most companies,...
Words: 527 - Pages: 3
...Corporate governance Estachy Simon Case Study : Enron Summary : I- Presentation and chronology II- The financial arrangement III- How the governance can explain it ? IV- Questioning the corporate governance model V- Conclusion I- Presentation and chronology: Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Enron employed approximately 20,000 staff and was one of the world's major electricity, natural gas, communications, and pulp and papercompanies, It was created in 1985, by the merger of the Houston Natural Gas company with InterNorth. This merger was management’s first attempt to develop a national pipeline system for natural gas. The following year, the former CEO of Houston Natural Gas, Kenneth Lay, became the chairman and CEO of Enron. At the beginning, its business model was very classic: production and transportation of gas, and distribution essentially on whosales markets. Quickly it became the major energy and petrochemical commodities trader in US. Throughout the late 1990s, Enron was almost universally considered one of the country's most innovative companies. The magazine Fortune named Enron "America's Most Innovative Company" for six consecutive years, from 1996 to 2000. In 1996, Jeffrey Skilling, old consultant of McKinsey, became the president and Chief Operating Officer of Enron, seven years after his enter his entry in the company. Enron has $40 billions in 1999, and $100 billions in 2000...
Words: 2407 - Pages: 10
...Title of Paper : Examining a Business Failure Name: Steven Turyahika Course: LDR/531 Organizational Leadership. Date: 05/08/2010 Instructor Name : Professor Paul Wallace Introduction This paper examines a business failure that occurred at Enron Corporation, an American energy company based in Houston, Texas. The corporation was formed in 1985 by Kenneth Lay after the merger of Houston and InterNorth natural gas pipeline companies. In the early 1990s when the federal government deregulated energy production, the company was able to thrive due to expanded markets that enabled the corporation to sell energy at high prices. By 1992, Enron had become the largest merchant of natural gas in North America and the gas trading business became the second largest contributor to Enron’s net income, with earnings before taxes and interest of $122million (Wikimedia Foundation, Inc, May, 2010 ). In an attempt to achieve further growth, Enron pursued a diversification strategy and by 2001, Enron had become a conglomerate that both owned and operated gas pipelines, pulp and paper plants, broadband assets, electricity and water plants internationally. The corporation also traded in financial markets for the same types of products...
Words: 1675 - Pages: 7
...Unraveling the Details of 10 High-Profile Accounting Scandals written by: ciel s cantoria • edited by: Linda Richter • updated: 12/30/2010 Before digging into the dirty details of each of these major accounting scandals, we’ll take a look at some of the tools that were used to first detect them – including sophisticated accounting systems and advancements in high-tech communication. Technology Fighting Against White Collar Fraud Looking back at the 10 major accounting scandals that changed the business world, it was noted that most of their unraveling came about during the turn of the new millennium, which was a time when the American trade and industries were beginning to experience the benefits and detriments of high-tech computerization. Information storage and communication became sophisticated, which made possible the compilation of hordes of information in an instant. Recording and verification of accounting transactions in realtime were made easier and more accurate, which facilitated the reconciliation of supporting documents versus sources, with very little effort needed. Federal regulators were provided with data that revealed the corrupt practices of high-profile companies and their CEOs. Their bankruptcies became inevitable as the Securities and Exchange Commission (SEC) and financial analysts began to see the signs of irregularities among numerous companies. When the SEC ordered the restatement of their financial reports in accordance with the GAAP rules, it...
Words: 5070 - Pages: 21
...Summary Enron Corporation is an energy trading, natural gas, and electric utilities company based in Houston, Texas. Formed in 1931, it was originally known as Northern Natural Gas Company. In 1985, Enron was formed by Kenneth Lay after the merger of Houston natural Gas Company and Inter North (Nebraska Pipeline Company). Fortune magazine named Enron “America’s most innovative company for 6 consecutive years. But all that came crashing down in a very bad scandal better known as the Enron Scandal, and it also led to the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. Enron’s stock price went down to pennies from over $90. It is ever the most famous company in the world, but it also is one of companies which fell down too fast. The aim of this paper is to analyze how and why the Enron Scandal took place, how the energy giant suddenly collapsed and eventually filed for bankruptcy. I. Special Purpose Entities Enron created partnerships within their own organization which led to them creating new financial instruments, called SPE’s which was used to falsify the accounting. Enron used SPE’s such as LJM Cayman LP, LJM2 Co-Investment LP, and Raptor vehicles, which is designed in part to hedge an Enron investment in a bankrupt broadband company Rhythm NetConnections, to “increase leverage and ROA without having to report debt on its balance sheet” (Journal of Accountancy, 2002). Enron entered into a series of transactions...
Words: 1936 - Pages: 8
...Case analysis 3 Chao Yao Major case 1 Adelphia Communications Corporation 1. What are the facts? In September 2005, the SEC charged Dearlove, a certified public accountant and formerly a partner with the accounting firm Deloitte& Touche LLP, with the improper conduct resulting in a violation of applicable professional standards. On July 24, 2009, the U.S. Court of Appeals for the District of Columbia supported the finding of the SEC that Dearlove engaged improper professional conduct. SEC found that Adelphia’s financial statements were not in accordance with the general accepted accounting principles and Dearlove violated general accepted auditing standards. The Adelphia communications Corporation was one of the largest cable television companies in the United States. Prior to 2000, the SEC found large amount Co-borrowed debt inside the company and its affiliated entities. After the big Enron scandal, SEC required public company to disclose the related-party transactions. As Adelphia disclosed its obligations as co-debtor with the Rigas entities, the stoke price of company declined sharply and finally was delisted from the NASDAQ. 2. What are the ethical issues? Dearlove had engaged in unreasonable conduct, such as approval of the Adelphia’s method of accounting for related-party transactions. His behaviors resulted in a violation of applicable professional standards. Deloitte, who engaged in auditing Adelphia, did not issued a fair auditor’s report. Adelphia...
Words: 2199 - Pages: 9