Discussion Week 2.docx - Oversimplifying the case of Enron and Arthur Andersen Enron was using some accounting practices that were questionable Because

Discussion Week 2.docx - Oversimplifying the case of Enron...

This preview shows page 1 - 2 out of 3 pages.

Oversimplifying the case of Enron and Arthur Andersen, Enron was using some accounting practices that were questionable. Because Arthur Andersen was an independent auditor, they were responsible for reporting any questionable accounting practices might be risky to the shareholders of Enron. The Security and Exchange Commission was responsible for requiring and publishing accurate information about Enron's accounting information. In the end, a few Enron employees went to jail, and Arthur Andersen stopped doing business under that name. Identify what you consider any conflicts of interest in the case of Enron and Arthur Andersen. What could have been done to avoid the conflicts of interest you identified? How would you change the laws to correct the problems that came up in the Enron and Arthur Andersen case? Explore how Enron and Arthur Andersen might have been encouraged to act ethically other than direct legal pressures. Enron case summary Enron was well known as one of the most successful and innovative company that had business in trading related to energy and other projects in US and around the globe. One of the biggest scandals in falsifying financial report was Enron case. Enron was not alone on this case, there was independent audit company, Arthur Anderson, which involved in suggesting and approving false report of Enron; even they suggested Enron to make report adjustment. One of the lessons learn from this scandal was the stringent requirement of Conflict of Interest Code of Conduct adherence and the strict auditing by authorities. Enron and AA crafted audit tricks to produce and approve the false report by not reporting debt and looses (Benston and Scott, 2002).
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read all 3 pages?

  • Fall '17
  • Conflict of interest, case of Enron, Enron & Andersen

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture