Ms Chan

During fraud period, Arthur Andersen did not provide any adverse opinion or disclaimer of opinion (Freddie Mac 2002). It also failed to place a condition or qualification on its statement as well; for example, “the financial statements present fairly, in all material respects, the financial position of Freddie Mac … for each of the three years in the period ended December 31, 2001, in conformity with GAAP” (Freddie Mac 2001). Arthur Andersen’s reputation was damaged due to its handling of the auditing of Enron, and it filed for bankruptcy at last. On March 2002, PwC took over auditing duties from Arthur Andersen, and refused to certify the company's books (Barta et al. 2003). It identified that these accounting policies were incorrect, prompting the Board an investigation. Also, PwC notified company of material weaknesses that existed in its internal controls over financial reporting during 2003 (Freddie Mac). According to the audit reports for 2004, 2005, and 2006, the financial statements fairly represented the performance except for some weaknesses of internal control pointed out by

Arthur Andersen (AA) contributed to the Enron disaster when it has failed to the management by failing to have Enron establish and enforce its own internal control. There has been flaws to AA‘s internal control. There has been assumption that AA partners were too motivated by revenue recognition thus, overlooking several criteria when providing their services to Enron. Additionally, AA also recognised the retention of audit clients as vital and a loss of any clients would be disadvantaged to an auditor’s career. In AA internal control, the person who is able to make most of the decisions is the person who is most concerned about the revenue or losses of the client’s company.

Obviously, if a firm is making much lower fees, then profitability can be restored only by cutting back on the amount of audit work, thus lowering the auditor's ability to detect misstatements. If the auditor views the client primarily as a future income stream, questions arise about the auditor's financial independence. Thus, the issue becomes a combination of pricing and tenure where an auditor must hold on to a client in order to recoup costs and to ultimately reach profitability. In our case, the audit companies were after the consulting fees they charged Crazy Eddie.

The fragile of complex and large systems, it is argued, is addressed through the catastrophic events that happened in different fields. This report looks at three serious systemic failures in engineering and finance domains among the history, including the Disaster of Space Shuttle Columbia in 2003, the Japanese asset bubble in late 1980s and the explosion of Deepwater Horizon in 2010. The research draws upon final reports of NASA, related magazines and published books. Looking through the lenses of those catastrophes, the analysis reveals the tremendous loss and effect of system failures and gives a lesson to avoid similar disasters in the future.

Dr. Wendy Chung is a medicinal geneticist who sees patients and perform research to find answers to rare genetic condition treatment. The topic of the presentation was about precision medicine. She defined precision medicine as providing the right treatment for the right patient at the right time. And engaging the patient in a way that will enable them to maintain and improve their health and their family. Also, a cost played a key component when it came to precision medicine. Running a specialized test to run sequencing might cause financial burdensome to patients. It also depended on how an insurance plan will cover it or not. Dr. Chung indicated that the current diagnosis method was not a rational way to diagnose or to treat patients due

The Enron scandal was one of the most notorious bankruptcies of all time. Many people know about the energy titan’s downfall but less realize that it was also one of the biggest auditing blunders in American corporate history, leading to the dissolution of the Arthur Andersen LLP, which at the time was one of the five largest auditing and accountancy partnerships in the world. The most intriguing aspect of this case is that Andersen was eventually cleared by the United States Supreme Court, yet the company still failed to live on due to its tarnished reputation stemming from its unethical behaviors. The pressure to generate revenue for clients while simultaneously auditing their books became too large a burden for the firm and they eventually resorted to unethical means to achieve their objectives. The demise of the Andersen accounting firm shows the true importance of practicing good ethics and maintaining a good reputation amongst peers; the vitality of the business could depend on sustaining a clean image in the ever-changing business world.

Arthur Andersen was one of the Big 5 accounting firms and the most respected. It was co-founded by Arthur Andersen in 1913. The change in culture and personalities at Arthur Andersen forced the company to involve in scandals. Over the time, profit pressure was increased due to which Arthur Andersen manipulated Enron’s false profits and cash flow statements. Arthur Andersen generated fake profit, hid the losses and kept financing off the Enron’s consolidated financial statements. It also failed to recognize the Generally Accepted Accounting Principles. Also many transactions between Enron and Special Purpose entities were not in the interest of Enron’s Shareholder. Their profits were manipulated by falsely boosting management bonus arrangements.

Nevertheless, Mr. Spacek shaped the firm into a genuine international company and during his 26-year term (1947 – 1973), the firm’s client-base rose from 2,300 to 50,000. Still, the company became increasingly involved in providing consulting services in the 1970s and in 1988, the Arthur Andersen & Co. (AA&Co.) was the largest consulting firm in the world. By this time, I had joined the firm as a Senior Executive Assistant and in 1989 after years of disharmony; the firm was split into two companies, AA&Co. (accounting services) and Andersen Consulting (consulting services). Although these entities were financially separate, they were governed by Switzerland-based Arthur Andersen Société Cooperative later named Andersen Worldwide SC, the ruling body of the worldwide Andersen organization.

Jenkins wondered why if the actual number of consultants was nearly 8% higher than budgeted (see Exhibit 2), revenues had increased only 1%. Were consultants becoming less productive? She knew that a key operating statistic for consulting organizations was the percentage of time billed.

Read and summarize the article, "Client Engagement Risks and the Auditor Search Period," by Khalil, Cohen, and Schwartz in Accounting Horizons, Volume 25, Number 4 (2011), pp. 685 - 702.

The following decade, McKinsey experienced slower growth due to competition from BCG as well as the overall economic and social environment in Europe and the US. This led the firm to realize the need for knowledge management, client impact, and developing multiple career paths for the firm's consultants to create growth in the future. As the company made these changes, it increased their capacity to support the strategic objective of changing McKinsey into a firm focused more on clientele services.

The first cultural change was that Andersen embarked on a path that valued consulting service which charged hefty fees ahead of auditing in 1990s. Compared to its original major service, auditing that required accountants to insist independence of judgment, consulting should cater to clients’ requirements and fix problems from client’s perspectives. The situation that two roles mixed in Andersen made top managers decide to sell more consulting service which earned higher profits.

In 1963 Bruce Henderson billed a total of $500 for his first month 's work at the Boston Consulting Group. Little did he know that over the next 40 years, his company of 1 employee in Boston would grow to more than 2,600 employees throughout 37 countries, together, generating over $1 billion a year in profit. Today, with 60 offices worldwide, the company is prospering beyond Henderson 's wildest dreams.

2001. It was the year that every individual; man, woman and children on Earth would remember. There was the September 11 event which was considered the worst terrorist attack that has happened in U.S. history, killing a total of 2, 977 people. And not long after that, in the business world, on December 2, the greatest corporate failure was exposed. The crash of Enron in US, followed by the worldwide collapse of its auditor, Arthur Andersen became one the most popular accounting scandal where it is still being talked about even after a decade has passed. Following this scandal, other massive organizations like WorldCom (2002), AIG (2004), and Satyam Computer Services (2009) shared the same fate. Since then, there have been questions being

The case of Enron Corporation and Andersen, LLP can be noted as one of the most infamous fraud scandals in US history. Investors lost millions of dollars and ruined the public’s trust. Enron was once the seventh largest public company in the United States and Andersen LLP was the world’s largest and most respected business organizations. Enron’s stock prices soared to approximately $100 to less than $10 in 2001. How did these two big giants fall into oblivion and what could have been done to avoid the disaster of these companies?