Enron vs Author Andersen.docx - Enron vs Author Andersen...

Enron vs Author Andersen: The Corporate Crime of the Century
Identify what you consider any conflicts of interest in the case of Enron and Arthur Andersen.
The demise of Enron and Arthur Andersen clearly explains that how unethical behavior by the leadership within
the organization and lack of strict corporate governance lead to the down fall of Enron and Author Andersen.
Enron in order to maintain its share prices used fraudulent accounting practices known as Mark to Market
account treatment (The smartest guys in the room), an approved accounting practice by the SEC and Author
Andersen allowed Enron to book potential future profits on the day a deal was closing. This is a very subjective
and fraudulent practice that shows false financial results to the public; this practice was easy to manipulate and
there was no proof of data. Arthur Andersen, an 89-year-old accounting firm once known as the gold standard of
integrity in auditing; was the accounting firm and the consulting firm for Enron was caught in this scandal. The
identified conflict of interest was the two roles played by Arthur Andersen, as the Auditor and also act as
Consultant to Enron. Anderson was manipulating the financials accounts of firms that they were auditing. As a
result, unfortunately, the profits outweighed the ethical standards of the company.