1. Arthur Andersen By: Darshana Patel & Kareen Ratnam Date: February 27, 2009 Teacher: Ms. Cuttle Course: BAT4M1

2. Agenda oOverview oBiography oEnron Scandal oInternational Auditors oImpact on Accounting oFuture Outlook oConclusion  Video

3. Overview oWas once one of the "Big Five" accounting firms oFound guilty of criminal charges relating to the firm's handling of the auditing of Enron oThis scandal calls into question the reliability/trust in accounting firms

4. Biography o Born on May 30, 1885, he was the founder of the accounting firm Arthur Andersen o Was hired as the assistant to the controller of Allis-Chalmers in Chicago o Became intrigued with the work of independent public accountants

5. Biography o 1908  became a Certified Public Accountant, the youngest CPA in the state of Illinois o 1913  he bought out a firm to form Andersen, Delaney & Co o Became Arthur Andersen & Co. in 1918

6. Biography o Died in 1947 o Was named to the Accounting Hall of Fame in 1953 o Northwestern University dedicated Arthur Andersen Hall in 1979 to commemorate his life

7. Enron Scandal o On June 15, 2002, Andersen was convicted of obstruction of justice for shredding Enron’s financial documents  Enron scandal o Nancy Temple and David Duncan were the responsible managers in this scandal

8. Enron Scandal o Surrendered its CPA licenses  August 31, 2002 - effectively putting the firm out of business in the U.S. o Taken over by the local firms of the other major international accounting firms

9. International Auditors oWas once known as "Big Five" auditors oToday it is known as the Big Four:  PricewaterhouseCoopers  Deloitte Touche Tohmatsu  Ernst & Young  KPMG

10. International Auditors oMain Objective: To provide auditing, tax, and consulting services to large corporations.

11. Impact on Accounting oJuly 30, 2002  creation of the U.S. Sarbanes-Oxley Act (SOX) signed into law oThis law provides:  Stronger penalties for fraud  Requires public companies to avoid making loans to management

12. Impact on Accounting oThis law also provides:  To report more information to the public  To maintain stronger independence from their auditors  To report on and have audited, their financial internal control procedures

13. Impact on Accounting oLoss of trust due to the misrepresentation of the financial position of companies

14. Scandals oEnron is not the only accounting scandal to date:  Chiquita Brands International  AIG  Only Recently -Satyam Computer Services Ltd. (Jan. 2009)

15. Future Outlooks To improve: oA number of accounting programs are now incorporating increased ethics- related material into their curriculum oThere is a movement throughout the field towards adoption of international accounting rules

16. Future Outlooks oIf these scandals keep up, the accounting profession will lose its respect and trust oEconomy as a whole is impacted when not using proper accounting procedures

17. Conclusion http://www.cbc.ca/money/story/20 02/06/15/enron_anderson020615. htmlhttp://www.cbc.ca/money/story/20 02/06/15/enron_anderson020615. html

18. Who is Arthur Andersen? He is a founder of a accounting firm Arthur Andersen.

19. Andersen was convicted of obstruction of justice for ___________ Enron’s financial documents which led to the Enron scandal. Shredding

20. The international auditors were once known as "Big Six" auditors or accounting firms. Today it is known as the “Big Five”. TRUE or FALSE FALSE. They are known as the “Big Four”

21. Which one of the following is not a accounting firm? a)PricewaterhouseCoopers b)Deloitte Touche Tohmatsu c)Arthur Andersen d)Ernst & Young c) Arthur Andersen

22. What is the main objective of a accounting firm? To provide auditing, tax, and consulting services to large corporations.

23. Which law came into action after the Enron Scandal? a) The Canadian Sarbanes-Oxley Act (SOX) b) The U.S. Sarbanes-Oxley Act (SOX) c) The U.K. Sarbanes-Oxley Act (SOX) d) The China Sarbanes-Oxley Act (SOX) b) The U.S. Sarbanes-Oxley Act (SOX)

24. What is the U.S. Sarbanes- Oxley Act (SOX)? A law or set of rules meant to prevent the accounting fraud like the Enron

25. Arthur Andersen was named to the Accounting Hall of Fame. True or False True

26. Name any other accounting scandal that has happened in the past or even recently, other than Enron. Chiquita Brands International, AIG, or Satyam Computer Services Ltd

27. How many jobs were lost after the Enron Scandal? a) 83000 b) 85000 c) 87000 d) 89000 b) 85000

28. KPMG is also one of the accounting firms. True or False True

29. When was the creation of the U.S. Sarbanes-Oxley Act (SOX), signed into law? a) June 30, 2002 b) June 30, 2001 c) July 30, 2002 d) July 30, 2001 c) July 30, 2002

30. Many accounting programs are now incorporating increased ethics-related material into their curriculum. True or False True

31. What is CPA? (full form) Certified Public Accountant

32. THANK YOU!