Discussion Forum 1

Discussion Forum 1 - Waste Management for the years 1993...

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Online Discussions: Ethical Considerations The “big four” accounting firms used to be the “big five.” Arthur Andersen was the fifth firm, but it went bankrupt in 2001 because of its role in the Enron scandal. That following year, after a number of scandals, Arthur Andersen failed altogether. Andersen surrendered its CPA licenses and was found guilty of criminal charges after they allowed Enron to inflate its profits, keep billions of dollars in debt off the books, and shredded evidence once subpoenas were issued. Looking back, this shouldn't have come as a great surprise. In the five years prior to Enron, Arthur Andersen played a major role in at least two other separate instances where ethical considerations were put aside during the auditing process. In June 2001, Arthur Andersen agreed to pay a $7 million civil fine after the Securities and Exchange Commission accused it of "knowingly or recklessly" issuing false and misleading audit reports for
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Unformatted text preview: Waste Management for the years 1993 though 1996 that inflated the company's earnings by more than $1 billion ("Waste management settles," 2001). In April 2001, Arthur Anderson agreed to pay $110 million to the shareholder's of Sunbeam Corporation. It was alleged that Sunbeam misstated its financial results during the 1990's, and Arthur Andersen certified those results as its auditor. Arthur admitted to no wrongdoing, but in hindsight, it's pretty hard to believe them (Manor, 2001). Manor, R. (2001, April 28). Arthur Andersen settles sunbeam earnings lawsuit . Retrieved from http://articles.chicagotribune.com/2001-04-28/business/0104280151_1_sunbeam-arthur-andersen-berger-montague Waste management settles . (2001, November 7). Retrieved from http://money.cnn.com/2001/11/07/news/waste_mgt/index.htm...
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