Arthur Anderson case Ideas and lessons

Arthur Anderson Once exemplified the rock solid character and integrity that was synonymous with the accounting profession. Accounting, auditing and consulting and independency.

Arthur Anderson Investors lost about $300 billion. Hundreds thousands of people lost their jobs. Closed 2002 after 90 years of business. Auditing independence-what does it mean to you? Independence vs combining auditing and consulting.

Arthur Anderson What is auditing main responsibility. What happens when growth becomes the highest priority? Growth becomes the culture. Growth was promoted and people who delivered big accounts were promoted too. This was done at the expense of quality.

Arthur Anderson The company paid 100s of millions of dollars to settle claims brought by clients and investors. News that Enron had overstated earnings became public, sending shock waves through the financial markets.

Arthur Anderson Arthur Anderson corrupted and got corrupted by: 1- Baptist Foundation of Arizona 2- Sunbeam 3- Waste Management 4- Enron. 5- and Telecoms and WorldCom

Arthur Anderson Enron was forced to restate five years’ worth of financial statements that Anderson had singed off. Shredding Enron statements Anderson CEO had viewed the $1 million a week in audit fees from Enron paid to Anderson along with the consulting fees it paid to Anderson’s Spin off firm, Accenture, as a significant opportunity to expand revenues at Anderson.

Culture is what matters most! Growth and making short money was the only language spoken at this big company with many things to hide and cover up. Trust then, was destroyed. Billions of dollars were lost. Many people lost their jobs. Again distrust prevailed.

What is next Culture Corporate governance Ethical lessons and education. Social responsibility. The stakeholder approach. The system thinking and the long term view of things and issues.

Good bye Arthur Anderson How do you view such case? How did it affect your attitude? Do you view business differently after reading this case? How? What ethical recommendations would you give to people who are going to be managers, or CEOs in the future?