In 2002, the accounting firm of Arthur Andersen voluntarily surrendered its licenses to practice as certified public

Fantastic news! We've Found the answer you've been seeking!

Question:

In 2002, the accounting firm of Arthur Andersen voluntarily surrendered its licenses to practice as certified public accountants (CPA's) in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron. The Powers Committee (appointed by Enron's board to look into the firm's accounting in October 2001) came to the following assessment: "The evidence available to us suggests that Andersen did not fulfill its professional responsibilities in connection with its audits of Enron's financial statements, or its obligation to bring to the attention of Enron's Board (or the Audit and Compliance Committee) concerns about Enron's internal contracts over the related-party transactions". The Andersen indictment also put a spotlight on its faulty audits of other companies, most notably Waste Management, Sunbeam, the Baptist Foundation of Arizona, and WorldCom. EXPLAIN why you think Arthur Andersen (AA) acted in the way it did in its relationship with Enron.

Be sure to DISCUSS your ideas and conclusions about AA's culture, leadership, and its view about its own stakeholders.