Management Planning- Arthur Anderson

1299 WordsSep 7, 20086 Pages
In this paper, the writer will evaluate the planning function of management within Arthur Andersen. Specifically, the paper will discuss at least one legal, ethical, and social responsibility issue that impacts Arthur Andersen. Additionally, this paper will analyze the impact these factors have on Arthur Andersen’s management planning. Finally, this paper will analyze at least three factors that influence Arthur Andersen’s strategic, tactical, operational, and contingency planning. The firm of Arthur Andersen LLP was founded in 1913 by Arthur Andersen and Clarence DeLany and named Andersen, DeLany & Co. The firm later changed its name to Arthur Andersen & Co. in 1918. Arthur Andersen LLP, based in Chicago, Illinois, was one of…show more content…
Enron was one of Andersen’s largest customers that relied on the Arthur Andersen’s firm for accounting, auditing, and consulting advice. Arthur Andersen violated its legal responsibility when company officials directed employees to shred all documents relating to the Enron audits, after its lawyers determined an SEC investigation into their accounting practices was inevitable. As it turned out, this had a very adverse effect on the firm’s ability to continue practicing, its reputable reputation was publicly dismantled, and led to the eventual collapse of the firm. This impacted its management planning because the firm initially adhered to the company’s file retention policy, but only destroyed the Enron documents when it knew these documents will become potentially damaging to the firm. The firm knew of its legal obligation and shoul have followed the legal guidance that would have prevented the destruction of documents having knowledge of of the potential or impending litigation. Ethical Issue As an objective auditor, Arthur Andersen violated its own fundamental ethical responsibilities by overlooking and allowing questionable accounting practices to dominate it operations. Arthur Andersen had an ethical repossibility to challenging these practices and even if it meant losing a valued customer and financially lucrative business opportunities. The firm showed a total lack of integrity and violated every rule of ethics governing the
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