...Arthur Andersen:- Arthur Andersen founded the company in 1913 but after his death Leonard Spacek took the leadership in 1947. Under his leadership of 26 years, Authur Andersen & Co. becomes a genuine international company. They had opened their offices in more than 25 countries with a staff of more than 12000. In 1970’s they started providing consulting services and by the 1988 they become the largest consulting company of the world. However in the mid 1980’s many cases were filed against the company on the ground that they failed to realize the financial weekness and the finding about the audited company. When real problem started: In 1988 Arthur Andersen Company earn around $29 million revenue from which $4 million earn by auditing work and $25 million earn by consulting work. Moreover on the same time a company went bankrupt which was audited by Arthur Andersen and for that they were fined by law. Consulting part of the company regularly increasing pressure to separate from auditing because they seems themselves more profitable and want to work independently. As a result the company was divided into two parts: Arthur Andersen & Company and Andersen Consulting. In the early 1990s Arthur Andersen was sued by Resolution Trust Corporation for the negligence in its auditing failure of Ben Franklin Saving & Trust. This leads to the loss of market value and number of clients of the company. After analysis a huge potential in consulting business, Arthur Andersen &...
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...Ethics Case: Arthur Andersen’s Troubles Once the largest professional services firm in the world, and arguably the most respected, Arthur Andersen LLP (AA) has disappeared. The Big 5 accounting firms are now the Big 4. Why did this happen? How did it happen? What are the lessons to be learned? Arthur Andersen, a twenty-eight-year-old Northwestern University accounting professor, co-founded the firm in 1913. Tales of his integrity are legendary, and the culture of the firm was very much in his image. For example, “Just months after [Andersen] set up shop in Chicago, the president of a local railroad insisted that he approve a transaction that would have inflated earnings. Andersen told the executive there was “not enough money in the City of Chicago” to make him do it.”1 In 1954, consulting services began with the installation of the first mainframe computer at General Electric to automate its payroll systems. By 1978, AA became the largest professional services firm in the world with revenues of $546 million, and by 1984 consulting brought in more profit than auditing. In 1989, the consulting operation, wanting more control and a larger share of profit, became a separate part of a Swiss partnership from the audit operation. In 2000, following an arbitrator’s ruling that a break fee of $1 billion be paid, Andersen Consulting split completely and changed its name to Accenture. AA, the audit practice, continued to offer a limited set of related services, such as tax advice.2 Changing...
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...Arthur Andersen Collapse Introduction Arthur Andersen was one of the biggest top 5 accounting firms around the country, practicing globally. The firm ran into many ethical issues when becoming involved in the Enron scandal, which affected the company globally. The ethical perceptions across cultures affected the employment of many people that ended up losing their jobs or transferring to other firms. There were many risks and consequences involved in the demise of Arthur Andersen. All of the risks involved affected the firm as a whole, around the world. Ethical Issues Ethical issues involving the demise of Arthur Andersen are solely based around the obstruction of justice involving the Enron case. “Its workers had destroyed ‘a significant but undetermined number’ of documents related to Enron.” (Kadlec, 2002) Destroying documents that were needed for future court proceedings involving Enron not only helped the collapse of Enron, but destroyed the Arthur Andersen firm in the process. Arthur Andersen was not only destroyed in the United States but globally as well. Employees quit and found new jobs, and clients “decided to quit the firm—not because the accountants are bad, but because the Andersen name is poison.” (Ackman, 2002) Over 85,000 employees worldwide, most of which had nothing to do with the Enron scandal were without a job, all because the employees had received a memo to destroy documents that should not have been destroyed. Globally, the demise of Arthur...
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...thousands lost their jobs and pensions. Another company involved in the scandal was Arthur Andersen, an accounting firm; Enron was their client. Arthur Andersen continued to perform bad audits even after a warning from SEC. If Arthur Andersen employees had been ethical, after the warning, the Enron Scandal would not have had led to the conviction and dissolution of the Arthur Andersen accounting firm. Arthur E. Andersen was born in a small town in Illinois and by the age of 16, he was an orphan. He was out in the world on his own. Luckily, his father’s employer was kind enough to allow Andersen to work in the mailroom at Fraser &ump; Chalmers. He attended college courses at night while making his way from the mailroom to the assistant controller position. Andersen joined Price Waterhouse &ump; Co and then took his Certified Public Accounting exam. He also was a professor at No... ... middle of paper ... ...s. The ethical values of Arthur Andersen employees at the time should have been enforce, had this been done the conviction and dissolution of the firm would not have happened. Works Cited Glater, Jonathan. "Enron Trail Stirs Memory of Andersen." New York Times 21 Feb 2006, web. McRoberts, Flynn. "The Fall of Andersen." Chicago Tribune 1 Sept 2002, web. Sloan, Allan. "The Jury's In: Greed Isn't Good." Newsweek. 24 June 2002: 37-38. Squires, Susan. Inside Arthur Andersen: shifting values, unexpected consequences. FT Press, 2003....
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...The Rise and Fall of Arthur Andersen LLP In October 2001, Enron was accused of overstating their earnings in the last few years in excess of $1 billion dollars (Doost, 2001). At the same time, Arthur Andersen, one of the most reputable auditing firms, was responsible for auditing Enron’s financial statements. The Security Exchange Commission (SEC) ordered Arthur Andersen to provide all relevant Enron documentation and auditing files. Going against Arthur Andersen’s impeccable reputation of honesty, David B. Duncan, the Arthur Andersen partner in charge of the Enron account, had his staff destroy thousands of pages of documents and records related to this case of fraud (Oppel & Eichenwald, 2002). Ultimately, the Supreme Court of the United States overturned Arthur Andersen’s conviction of "knowingly...corruptly persuading another person to withhold or alter documents in an official proceeding" (Wojdacz, 2009). However, Arthur Andersen had imploded and was not able to recover. Founder and His Principles Arthur Andersen was founded December 11, 1913. Arthur Andersen had a reputation of exemplary honesty. Arthur Andersen himself came from an immigrant Norwegian family. He worked for Price Waterhouse. At 23, Andersen became the youngest certified public accountant (CPA) in the state of Illinois by educating himself at night (Marotta & Selman, 2009). At this time, CPAs were trying to establish accounting as a profession. Marotta and Selman (2009) stated Integral...
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...Unethical Practices of Arthur Andersen 1.) I think that Arthur Andersen contributed a lot to the Enron Disaster. I think that it all started when AA became its own company. Because of this, the two companies became rivals. AA’s main focus was on revenues. The company did not care how things were done as long as it put money in their pockets. Also, from what I understand, the company made the auditors feel that if they were to say anything that would make the company lose a client, then the auditor would lose their job. Auditors are there to make sure that things are being run ethically. The risk of getting in trouble by their employer blurred the line between what is right and what is wrong. Another thing that I feel like was a huge contributing factor in the Enron disaster was the approval of Special Purpose Entities that were used to generate false information. These entries were used to cover the truth of what was going on in the company. This is extremely unethical. It sounds to me like the integrity of the company went downhill after the split. 2.) I feel like most of the decisions that were made by Arthur Anderson were faulty. They were negligent in almost every decision they made. One of the biggest things was the special purpose entries which were used to cover the truth of what was going on in the company. Lying to make a company look better is extremely unethical. An investor might look into the company and want to invest because of great profits and really the company...
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...if the Sarbanes-Oxley Act had been enacted in 1999. Next we will determine and discuss which elements of the framework for ethical decision making in business (from Chapter 5) played the biggest role in the Anderson case. Explain your reasoning. Lastly, we will discuss how the situations at Arthur Anderson may have played out differently if their senior management had displayed the habits of strong ethical leaders. Provide specific examples to support your response. Introduction Known as one of the Big Five the Arthur Andersen firm was founded in 1913 by Arthur Andersen and his partner Clarence Delany. The company name was very synonymous for their integrity, ethics and trust, which is necessary for an accounting firm to have and stand by. Our textbook states, “Andersen set standards for the accounting profession and advanced new initiatives on the strength of its then undeniable integrity (pg. 348). Andersen once shown a strong character but with the rise of many high-profile companies filing for bankruptcy, that same character would come into question. Analyzing the Sarbanes-Oxley Act was enacted to by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. We will look at this act and the legal compliance that it requires and see how this act could have prevented many of the questionable accounting practices that the company struggled/suffered...
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...Transcripción de Andersen : Una obstrucción de la justicia ? Andersen : Una obstrucción de la justicia ? David Duncan fue el testigo principal en el caso Andersen. Él triturar los documentos que son necesarios para la investigación de la SEC . mientras que Nancy Temple era el consejo legal y abogado en el departamento jurídico de la Anderson. Ella ordenó David Duncan para destruir todos los documentos relacionados con Enron con el fin de estar a salvo en la investigación. Por lo tanto Nancy Temple era más responsable de la Andersen SEC y el Departamento de Justicia que han intentado ANDERSEN AS FIRME Y también debe tener como objetivo a individuos concreta realizada ACTOS ILÍCITOS . En opinión del tribunal , las instrucciones eran demasiado vagas para permitir que un jurado para encontrar realmente había ocurrido la obstrucción de la justicia. El tribunal consideró que las instrucciones fueron redactadas de tal manera que Andersen pudo haber sido condenado sin prueba alguna de que la empresa sabía que había violado la ley o que no había habido un enlace a cualquier procedimiento oficial que prohibía la destrucción de documentos. A pesar de la condena de Andersen fue anulada , no creemos que los empleados de Andersen actuaron de una manera ética en el caso de la fiscalía principales socios en la oficina de Andersen Chicago habían permitido Enron utilizar prácticas contables agresivas que eran cuestionables , dada la naturaleza de los negocios de Enron. 2 . Los temas...
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...Arthur Anderson 1. Environment, strategic, organizational changes * High quality accounting, promoting integrity and sound audit opinions over short run profits * 1930’s- government adopted laws that require public companies to submit financial statements to independent auditor each year * mantra- good service, quality audits, well managed staff, profits for firm * auditors rewarded for making sound auditing decisions * decision rights to Professional Standards Group * firm did not become wealthy in the early years, partners were well respected in communities * 1950’s- Joseph Glickauf- computers to automate bookkeeping * 1979-42% of $645m fees came from consulting * 1989- split to AC and AA * accounting business grew slowly in 1990 due to increased competition and mergers * AA adopted new strategy of generating profits, “it was a matter of pride” * New rules- partners retired at 56, less experienced auditors and fewer partners overseeing audits * New breeds of partners- Samek, Allgyer, signing off on inaccurate financial statements * 1997- AC split completely and became Accenture, AA underwent setback when they didn't receive the $14b expected payment from AC * AA- 2X performance evaluation, relaxed dress code, wooden doors removed * New service- take over entire internal bookkeeping for clients- impaired quality of audits * Enron-1986, wholesale energy trading * Anderson hired Enron in 1990 * Speed...
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...Global Perspectives on Accounting Education Volume 3, 2006, 27-48 ENRON AND ARTHUR ANDERSEN: THE CASE OF THE CROOKED E AND THE FALLEN A Gary M. Cunningham Visiting Professor Department of Business Administration Åbo Akademi University Turku, Finland Jean E. Harris Accounting Department Pennsylvania State University, Harrisburg Campus School of Business Administration Middletown, Pennsylvania USA ABSTRACT Outside the US, the failures of Enron and Arthur Andersen remain puzzles. How could the accounting and audit failures associated with Enron and Arthur Andersen happen in the US where auditing is sophisticated, accounting principles are strong, and disclosure is emphasized? This is a teaching case for persons outside the US to review the financial reporting and auditing issues related to Enron and to explain the regulation of accounting and auditing in the US. It has broad implications for corporate governance and accounting regulation in other countries as well. n the years after the Enron Corporation declared bankruptcy in 2001 and Arthur Andersen failed in 2002, people are still asking, especially those outside the US, how could this happen? What went wrong? The US has a well-developed set of Generally Accepted Accounting Principles (GAAP) that requires extensive disclosures in audited financial statements, and a well-established federal agency, the Securities and Exchange Commission (SEC) that monitors financial reporting. This case is written for accounting students and...
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...Fødsel og dåb H.C. Andersen blev døbt umiddelbart efter fødslen som mange andre pga. den store børnedødelighed. I kirkebogen til Sankt Hans Kirke i Odense[2] er skrevet, at fødslen fandt sted kl. 2 om natten den 2. april 1805, og at den stedfortrædende præst forrettede dåben. Den 15. april blev dåben bekræftet ved en fremstilling i kirken, og barnet blev her indskrevet med navnet: Hans Christian. H.C. Andersens Hus i Odense. En dåbsattest blev først fremstillet i november 1823, måske i forbindelse med en arvesag (farfarens død), men er senere forsynet med en randbemærkning, hvoraf det fremgik, at fødestedet var Hjørnehuset, Hans Jensens Stræde 43, en del af det nuværende museum H.C. Andersens Hus. Efter sigende skyldes tilføjelsen, at H. C. Andersen i året 1867 skulle udnævnes til æresborger i Odense. At fødestedet skulle være hjørnehuset i Hans Jensens Stræde er derfor uden berigtigelse og H.C. Andersen skulle selv have benægtet det; han sagde "jeg er ikke født i sådan en rønne".[3] Der var seks faddere ved dåbsfremstillingen: madam Sille Marie Breineberg f. Westphalen bar barnet; jomfru Friederiche Pommer; skomagermester Peder Waltersdorff; hattemager Jens Heinrich Dorch; snedkersvend Anders Jørgensen; portneren ved Odense Gråbrødre Hospital, Nicolas Gomard. Som forældre står i kirkebogen den 22-årige skomagersvend Hans Andersen (født 1782, død 1816, var også soldat)[4] og den 34-årige Anne Marie Andersdatter. Parret indgik giftermål i Skt. Knuds Kirke i Odense den...
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...Fortællestil betyder, hvordan historien bliver fortalt. Man kan bruge sproget til at skabe sin helt egen fortællestil, eller man kan lade sig inspirere af andres måde at bruge sproget på. En forfatter kan også skabe sin egen fortællestil, ved at skrive om nogle bestemte temaer. H.C. Andersen havde sin helt egen fortællestil, så man næsten altid kan genkende, når det er en H.C. Andersen-tekst, man læser. Eksempler på hans særlige fortællestil er: barnlig skrivestil, billedsprog, bogstavrim, humor, kyssene, latteren, talesprog, opremsninger. Karen Blixen Af journalist og cand.mag. Karina Søby Madsen, iBureauet/Dagbladet Information. Opdateret af stud.mag. Ida Winther-Jensen 2013 Skrive- og fortællestil Danner bl.a. menuoversigten Det er noget ganske særligt at læse Karen Blixen, fordi hendes sprog i den grad er mættet af sproglige vignetter i form af symboler, sammenligninger og metaforer. Sproget bærer præg af lange snørklede sætninger og gammeldags sprogbrug, og de metaforer, der benyttes, er så lette og luftige, at man uvægerligt bliver forført ind i sproget og ind i de Blixenske fortællinger. Fortællestilen trækker på solide traditioner i verdenslitteraturen, blandt andet den mundtlige fortælletradition, gotik og eventyret. Eksempelvis er Blixen stærkt inspireret af ”Tusind og én nat” og dennes fortæller Sheherezade. Værkerne er fyldt med intertekstuelle referencer til verdenshistorien, blandt andet Bibelen, klassisk litteratur, Kierkegaard, Shakespeare, Goethe og St. St...
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...Financial Accounting Business Folio Task 1 (Team Assignment) DUE DATE: Your tutorial in week 4 If you do not hand in your business folio to your tutor at your tutorial in the specified week, then 2 marks per day will be deducted from the available marks for this Task. This 2-mark- deduction applies to all submissions after your tutorial time, even if still on the same day of your tutorial. Business folios will be only handed back at tutorials. It is your responsibility to attend the tutorials to submit and collect your business folio. You need to keep your marked Task 1 after you collect it from your tutor as you will need to submit it with your Task 2. Business Folio is a team assignment, submission of individual work is not accepted. It is your responsibility to find your team member, form into a group and conduct team work to develop your team working skills. Prior to commencing your assignment 1. You are required to form a team with one or two other students from your class (teams must consist of two or three students). Complete the team details (Pro Forma: Task 1A). All of your submitted tasks should be typed. Handwritten work is not eligible for submission. 2. Your team is to commence a new business; the form of ownership is to be a company. You will each contribute $200,000 cash and receive shares in the company to that value. There are conditions involved: • The business must be either a retail or wholesale business that appeals to you and...
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...class in society, struggling mentally, and being tortured by one’s own identity both sexually and racially? In Hans Christian Andersen’s tale, “The Servant,” the protagonist, named Sara, lives exactly such an unpleasant life. In this paper, Jewish identity, the role of women in 19th century Christian Denmark, and how these two identities intersect will be analyzed. In this tale, Andersen uses the dichotomy of “Deity and Death” to portrait the life of the unique character with both Jewish identity and female identity in 19th Century Denmark. In “The Servant,” Sara’s Jewish identity makes her unable to “formally” accept or be assimilated into Christianity, though she is pro-Christian in her heart. “I can no longer be a silent spectator of the gleaming eyes of the child, and of her deep and earnest longing for the words of the Gospel,’ said the teacher.” (Andersen 488) Sara is forbidden to become a Christian because of her parents’ intervention, especially her mother’s will. Why Sara’s family leaves Sara such a heavy burden? How does Jewish culture relate to Jewish beliefs? What is the idea Andersen trying to express behind? The religious belief among the Jews is so unique that they define how their religion is long time ago. Judaism is the religion, philosophy, and way of life of the Jewish people. (Jacobs, 551) Judith Lieu writes about Jewish people that, “by law or by fear of punishment for ’loving their ancestral customs’” (259) Jewish people strictly follow...
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...profits became intense. Andersen leaders responded by pushing partners to become salesmen -- upsetting the delicate balancing act any auditor must perform between pleasing a client and looking out for the public investor. Seeds for Demise Although nobody knew it at the time, the seeds for Arthur Andersen's eventual demise were sown in 1950, when the firm introduced the "Glickiac" to the world. Named after its inventor, an Andersen engineer named Joseph Glickauf, the clunky device created a sensation by demonstrating that computers weren't just for scientists: Companies could use them to automate their bookkeeping. This ushered in an entirely new business. Rather than just audit the books, Andersen would set up the computers clients needed to keep the books. It wasn't long before Andersen boasted by far the largest technology practice of any accounting firm, raking in huge profits. The flood of money introduced a new element of tension into the partnership. Under rules set by the auditors who ran the firm, all of the profits from all the practice areas had to go into one big pot to be divided among partners. But since the average consultant brought in more money than the average auditor, the consulting side complained the arrangement was unfair. The week after New Year's Day in 1989, at a world-wide meeting of the firm in Dallas, the consultants finally made their break. They won an agreement to separate into two units -- Arthur Andersen and Andersen Consulting -- under a...
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