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Android Under Attack

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1. CASE SUMMARY

Androids is an audit firm which provides audit and consulting services to their clients. Androids & Co started in 1913 when Arthur and Clarence, both from the audit firm of Price, bought out a small audit firm in Illinois to form Arthur, Clarence & Co, which became Androids & Co in 1918. Arthur Androids, who is the founder, headed the firm of Androids & Co until his death in 1945. He was a passionate supporter of high standards in the accounting industry. In 1945, Leonardo Sparky, who handled Androids at the founder’s death, continued this emphasis on honesty. For all these years, Android’s motto was “Think Straight, Talk Straight”.

David Lawrence joined Androids twenty years ago and earned a salary of USD 700,000 per annum. David is Androids’ partner and auditor who are responsible in auditing Enronaa’s account since 1987. Enronaa is a client of Androids for the past 16 years. David is one of the Androids’ partners who are responsible to check on Enronaa’s account and to ensure that they fairly representing the state of the business. The issues arise when there are evidences suggesting that Androids assisted Enronaa to sort of increase reported returns of off-balance sheet activities by units called raptors. In addition, the second issue that arises in Enronaa is many off-book partnerships were not properly accounted for. From this issue, David stated that millions in debts and losses had to be reflected in Enronaa’s books. David also confessed to Ken Bailey, the junior partner that Androids used accounting practices that allow Enronaa to hide their debts, but all of those are still within the context of fair value accounting.

Solid Waste is also one of the organizations that involved in this case, where Solid Waste is one of the Androids’ clients starting from 1971, even before Solid Waste becomes a public company. Solid

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