Andersen’s Case Auditing and Assurance Services

Arthur Andersen was atomic number 53 of the five biggest accounting signs in join States. Arthur Andersen is specific example around the most(prenominal) recent strain collapse, which is considered profound in American duty history. The firm, practicing in more(prenominal) than than 80 countries with thousands of employees, now lost its written report as an audit and accounting firm. in that respect atomic number 18 m both different thoughts and judgments virtually the fiber when Arthur Anderson failed its tasks to detect fraudulent fiscal activities on Enron and several different companies.The Enron follow filed bankruptcy in December of 2001. being well known as a big energy confederation which plate is located in Houston, the bankruptcy of the company drew lots off attentions from championship world. Questions were asked and lots of financial misstatements were revealed and Arthur Andersen Enrons extraneous auditing and accounting firm in Houston, was touch on. Stephens (2002) stated, Arthur Andersen who were accountable for managing Enrons audits, had misappropriatedly destroyed paper and electronic documents related to their representation of Enron (p. 4). The aspect soon went to the jury. Louwers et al. (2011) reported the instructions hinged on the formulateing of statue that makes it a crime to wittingly use intimidation or physiological force, threaten, or mistly persuade a nonher(prenominal) individual. consort to Oxford Dictionaries online, corrupt means having or showing a willingness to act dish geniusstly in return for coin or personal grow. In this case, the word corrupt was non applied appropriately to the actions of Anderson. in that respect was no evidence to prove that at that place is a person who is corrupt persuader.Who was the one that acted dishonestly? The court besides inevitably to identify the personal gain that a corrupt persuader can gain from having such action. The court could not take c are the answers to this issue, which means the decision is attached to the firms fate Arthur Andersen. Research by Stephens (2002) states that to clarify the instruction of Judge Harmon about corruptly, the prosecution describes the illegal require of four corrupt persuaders Duncan, synagogue, Thomas Bauer, and Michael Odom.After a a few(prenominal) days, the jury was not take to unanimously agree on the single(a) corrupt persuaders individualism (Stephens, 2002). As Louwers et al. (2011) stated that the issues that overturned the Andersen verdict were based on haywire jury instructions, not on whether Andersen was in situation guilty or innocent. It was not Andersen who go against the law it is individuals of the company who did. Hoxter (2005) argued that the instructions were faulty because they did not require proof that Andersen officials knew they were doing something wrong.The regnant destroying the documents was not a crime. There must(prenominal) be a person with permission who sent out the instructions for Arthur Andersen employees to do so. As Stephens (2002) restated from the interviews with reporters after the verdict, four jurors set Temple as that person. It is appropriated for the Supreme courtroom to overturn the lower courts decision because Judge Harmon used the word promptly with different meaning from the dictionary, which is indecent purpose, such as end to subvert or undermine the item finding ability of an official proceeding.The lower court failed in identifying the specific person who is corruptive persuader. According to Duska (2005), Arthur Anderson, a old firm, at one time, prided itself in its spot as auditor since it fulfilled an historic public function. As auditors, Andersens employees should ingest had clear minds to make sure that the financial statements that they audit are literally what were termination on in the company. However, big money that was made in the consulting means the responsibilities th at auditors withdraw to face is heavier.The SEC and the department of legal expert shouldve tried to targeted specific individuals who had engaged in acts because it seems not fair for the rest of the firm. According to Cunningham (2005), It is a shame that the actions of a few individuals at Andersen caused 28,000 employees in the U. S. to lose their jobs (p. 6). Indeed, displace the complete firm out of subscriber line for the unethical actions of a couple of individuals was the real sin. Andersens conviction was overturned does not mean that its employees acted in ethical manner.McNamee and Palmeri (2002) provided entropy about Arthur Andersons cleaning-up mission when the Enron case started to topple. From Andersons internal document, Enron group was also busy amending four diagnose memos to objurgate(a) the record of its review of Enrons wrick and conflicted partnership deals (McNamee and Palmeri, 2002). Moreover, David Duncan overruled the concerns on at least four oc casions, siding instead with Enron on controversial accounting that helps to hide debt inwardness and brought up the earnings.That is not all, there are also evidences said that Duncans team wrote memos which are falsely stated that PSG partners had subscribe off on Enrons inventive bookkeeping. Nancy Temple is the attorney for Arthur Andersen. She is the one who should all the way know about all the regulations and should not be the one who acted unethically. According to McNamee and Palmer (2002), memos from Nancy Temple to David Duncan were found which can considered the main key in the conviction of Duncan about shredding the documents. It is more for Nancy Temple who is more responsible for the Andersen saga.The folk action lawsuit against Andersen also has another(prenominal) divulge which include other entities name in there because those entities also had involved in Enrons case. These entities helped Enron to cover up because by helping them they make more profit. Fro m Arthur Andersens case, entities and accounting firms in business world should learn lessons for their own goods. If the employees get word of any concerning about the legality of any records, they should contact the legal department right away. There is nothing wrong disposing of business papers that are not needed.It is illegal only when retention is required by law or regulation harmonize to Stephens (2002). Reference Page Hoxter, C. J. (2005). Arthur Andersen Conviction Overturned. Caribbean Business, 33(25), 8. Duska, R. (2005). The true Auditor Skeptic or riches Accumulator? Ethical Lessons Learned from the Arthur Andersen Debacle. ledger Of Business Ethics, 57(1), 17-29. doi10. 1007/s10551-004-3818-1 Stephens, D. O. (2002). Lies, Corruption, and Document Destruction. info Management Journal, 36(5), 23. McNamee, M. , Borrus, A. , & Palmeri, C. (2002). OUT OF CONTROL AT ANDERSEN.Businessweek, (3777), 32-33. Cunningham, C. (2005, July-August). Ruing Andersens demise and t he loss of audit competition. financial Executive, 21(6), 6. Retrieved from http//go. galegroup. com. glbvv001. enmu. edu/ps/i. do? id=GALE%7CA134300985=2. 1=nm_a_enmu=r=EAIM=w In Oxford Dictionaries online. Retrieved from http//oxforddictionaries. com/us/definition/american_english/corrupt? q=corrupt Louwers, T. J. , Ramsay, R. J. , Sinason, D. H, Strawser, J. R, & Thinodeau, J. C. (2011). Auditing & Assurance service (5th, ed. ). NY McGraw-Hill Irwin.