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Arthur Andersen Case

Arthur Andersen LLP, based in Chicago, is an American holding company and formerly one of the "Big Five"
accounting firms among PricewaterhouseCoopers, Deloitte, Ernst & Young and KPMG, providing auditing, tax,
and consulting services to large corporations.

Arthur Andersen held total control over the firm and would do whatever it took to secure a small unified firm. Even
after his death, Arthur Andersen left a set of values which would help the firm continue to grow and thrive:

 Integrity and Honesty – Think straight, talk straight values that ensured the auditor’s duty to protect the public
established the firm’s reputation.
 One Firm, One Voice Partnership Model – A model for unity and cooperation that maintained control of the firm
and firm values
 Training to a Share Method – A professional development strategy to create a uniform and predictable
workforce that could be trusted to do as they were taught.

It was through these values that Arthur Andersen & Co. was able to become one of the largest accounting firms in
the world.

Andersen Consulting vs. Arthur Andersen

Auditing had become an essential part of business after 1933 till 1970.

After that competition was rising, revenues were falling and the client list was growing smaller and smaller. Arthur
Andersen & Co needed a way to remain stable financially. The answer was consulting.

Later, Andersen consulting became Accenture and consulting began to generate more revenue than auditing. Finally,
in 2000, autonomy was reached and there were now two different business units with different cultures.

This led to a major shift in the values that made Arthur Andersen’s accounting practice what it was. The new value
that was on top of their list of values was serving the client.

This departing from their core values continued as more and more of their clients like Baptist Foundation of Arizona,
Sunbeam Corporation, Waste management and Enron were caught in financial fraud.

Ethically incorrect

Arthur Andersen had completely drifted from the values that the firm was built on. They now did whatever it took
to raise profits and would not dare to question the management behind it.

Arthur Andersen provided auditing services for Enron and continued to do so even when advised not to. David
Duncan was the partner responsible for the Enron account and consistently ignored the cautions that were
presented to him. He was focused on the client and the client only. The duty to protect the public and been
forgotten. The focus was clearly on the client when looking at Enron and the revenue it was going to bring in.

Then when the investigation began on the illegal financial activities, Duncan told everyone involved with Enron to
start shredding audit documents in order to prevent them from being used in court. The reason for this was that
Enron was in a serious downward spiral and the SEC was beginning an informal investigation into the matter.

In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United
States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron, an
energy corporation, which had filed for bankruptcy in 2001.

Result: Their unethical decision making and abandonment of their values led to their ultimate collapse.