100%(4)4 out of 4 people found this document helpful
This preview shows page 1 - 2 out of 2 pages.
Enron vs Author Andersen: The Corporate Crime of the CenturyIdentify 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 withinthe 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 ofintegrity 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.