Arthur Andersen and the Enron Scandal

Paper Summary:

This paper addresses the question about whether accounting firms should act as consultants for the same companies that they audit. It uses the case of the accounting firm, Arthur Andersen, and its complicity in the Enron debacle to explore this question. The paper also addresses several larger issues on business and accounting ethics and looks at the need for reform in the accounting industry as a way of ensuring public confidence in the integrity of the accounting system.

From the Paper:

"In late 2001, Arthur Andersen, one of the world's largest accounting firms, found itself plunged into what will likely be remembered as one of this generations greatest business scandals. The scandal involved Enron Corp., one of America's most successful corporations, and the darling of investors, employees, and market analysts alike. Enron was accused of a multitude of ethical breeches, including deliberately misleading shareholders about the company's true financial status. Ultimately, Enron was found guilty of a number of financial misdeeds, went bankrupt, and Anderson's involvement in the scandal brought the ethics of accounting firms into question."

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