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The following would be changes in laws to correct the problems that came up in the Enron and Arthur Anderson Case:
ENRON AND ARTHUR ANDERSEN 5Verify that financial statements are accurate which prevents the use of questionable/illegal accounting practices.Restrict auditors to audit activities only which prevents Improper relationships,reduce likelihood of compromising good audit for more revenue. Rotate partners assigned to client, so fresh eyes see work papers which prevents “Partner in Crime” relationship. Auditors must report to committee, who work for the board, not the company which prevents powerlessness of auditors by giving board power to investigate and rectify and companies from publishing misleading statements. Removes power from company personnel which prevents withholding of informationfrom auditors by making this illegal. Gives auditor a voice outside of the audit to attest to policies demonstrated by the company which prevents Information slipping by the SEC and stakeholders by giving more visibility to the firm.Makes it a felony to impede federal investigation, provides whistle-blower protection which prevents destruction of documents, will allow investigators to review work of auditors. Persons acting to corrupt or destroy evidence liable for extended prison term which prevents others from attempting to interfere in an official investigation (University of New Mexico, N.D).Explore How Enron and Arthur Andersen Might Have Been Encouraged to Act EthicallyOther Than Direct Legal Pressures.
ENRON AND ARTHUR ANDERSEN 6One concept to explore how Enron and Arthur Andersen might have been encouraged to act ethically other than direct legal pressures is have management that enforces integrity and ethics. This goes for both sides because when you have core values every core value should be a boulder and not a pebble. We spoke of ‘people management, quality, thought leadership, and financial performance’ earliest and people management, quality and thought leadership needed tobe better implement these so that things do not get out of hand. Leadership from the top down,