consulting business through their audit clients. This and other tactics was the first of many decisions that contributed to unethical business strategies. One of Anderson’s largest accounts was Enron. $52 million in fees were received from Enron, 50% of which were for auditing, and 0% for consulting. Enron went bankrupt in 2001 after accounting regularities were discovered. The use of questionable accounting practices made the firm’s financials look better than what they were in reality. The auditing
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ENRON- A Study of FAILURES Who, How, Why! Arthur Gudikunst, Ph.D. Revised: April, 2003 Professor of Finance Finance Department Bryant College Introduction: The saga of the ENRON Corporation has been unfolding in the media for well over a year. In the span of only three years, ENRON has gone from public and professional acclaim of the company and its senior executives to scorn, infamy and bankruptcy. Its public auditing firm, Arthur Andersen, has basically been destroyed, as well
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EMBA - OT “GLOBAL LEGAL FRAMEWORK & STRATEGIES” INDIVIDUAL PAPER “ ENRON CASE” Name : Suharto NIM : 13262051 “ Analyze Enron’s Case as PTCV according to the 5 Theory in and Relation to Act no 40/2007” Executive Summary Piercing the corporate veil is the judicial act of imposing personal liability on otherwise immune corporate officers, directors, and shareholders for the corporation’s wrongful act (Black Law Dictionary). In other words, courts may pierce the "veil" that the law uses to divide
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This paper will address and analyze the different ethical issues and the questionable accounting practices that occurred to one of the largest accounting firms in the United States. We will look and review the mandated requirements for legal compliance (from Chapter 4) and determine which requirements apply to the Arthur Anderson case. Then we will discuss how the issues with the Arthur Anderson case may have played out differently if the Sarbanes-Oxley Act had been enacted in 1999. Next we will
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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
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policy that reduced the health insurance of their staff showing openly that their main objective was profits. All this practices were extremely unethical openly encouraged by the top executives (Smith, 1997). 5. After all the public uproar over Enron and then the passage of the Sarbanes-Oxley Act to protect shareholders, why do you think we still
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Career Fair Mike Russell AIU Online Abstract Accurate accounting and the understanding can make or break your company or organization; not to mention possible jail time in the worse cases. The first way of ensuring accurate accounting is understanding the objectives. The second way is to understand the terminology of the accounting process and in the financial reporting aspects. The third way is to understand the ethics behind the accounting and reporting process. The forth way is to impement
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Question/Issue Presented What evidence can be found during a legal discovery and how does this affect the record-keeping policy of a business organization? Applicable Law and Ethical Standards Newby v. Enron Corp. , 2002 U.S. Dist. LEXIS 28397 (S.D. Tex. May 1, 2002) Newby v. Enron Corp. (In re Enron Cor... , 2003 U.S. Dist. LEXIS 1668, Fed. Sec. L. Rep. (CCH) P92404 (S.D. Tex. Jan. 28, 2003) United States v. Arthur Andersen LLP , 2002 U.S. Dist. LEXIS 26870 (S.D. Tex. May 24, 2002) 18 USCS § 1512
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expansion. A lot of of the matters we go through with the present economy are responsible for the unethical conduct in the accounting business. Two of the well-known corporations that were finally jammed and arraigned for unethical conducts were Enron and WorldCom. The misrepresentation of business statements and deceitful commotion in the stock market affects thousands of stakeholders to miss money. Throughout this humiliation, a hand full of people in this company was making millions of dollars
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Comply with Sarbanes-Oxley Act Nguyễn Phước Đại dnguyen0191@student.bristoluniversity.edu Bristol University BUS 555: Business Ethics 10/16/2013 Comply with Sarbanes-Oxley Act Cynics sometimes like to say that locks on doors only keep honest people out, and the same is often true for accounting rules and regulations. We only trust financial statements from honest companies. Hefty penalties for violating the rules may act as curb for executives who are considering whether to play with
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