Case Study of Arthur Andersen

1399 Words May 16th, 2012 6 Pages
Business Ethics Decision-Making Cases Write-ups

Arthur Andersen:
Questionable Accounting Practices

Name: Wen Jiangshan
Student ID:2011008274

Part I. Summary of the case
Case 2 mainly introduces how Arthur Andersen, who used to be one of the “Big Five” largest accounting firms in the United States, strayed away from accepted policies and stuck in a string of accounting scandals, finally closed its doors after 90 years of business. The firm’s name was synonymous with trust, integrity and ethics during a long period of time, however, Andersen failed to withstand the pressure from the competition of consulting service. Thus, it leaded to a negative influence on Andersen's corporate culture, which enabled
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|Failed to address serious accounting errors |Agreed to pay $110 million to resolve the |
| |Andersen | |claims |
| | |Company’s senior management aided and abetted | |
| | |others’ violations of antifraud, reporting and| |
| |Waste Management |record keeping provisions of federal |$20.5 billion losses to shareholders |
| | |securities laws; $1.4 billion of overstated |11,000 employees were laid off |
| | |earnings | |
|3 | | | |
| | |Assisted in the fraud by repeatedly issuing |Paid $220 million to Waste Management |
| | |unqualified audit opinions on Waste |shareholders and $7 million to the SEC |
| |Arthur |Management’s materially misleading financial |Was forced to promise not to sign off on |
| |Andersen |statements
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