Abstract

The case examines the emergence of Arthur Andersen as one of the leading auditing and consulting firms in the world, on the basis of its emphasis on integrity and ethics in business. The case explains the factors that led to deterioration in the firm’s culture during the 1990s. It examines Andersen’s role in accounting fraud at Enron, one of its major clients. The case also examines the criminal charges faced by the firm in the Enron case and how the Enron case eventually led to the closure of Andersen. The unethical practices of audit firms in the 1990s are also discussed. The case also takes a look at the various initiatives taken by the government and other regulatory authorities, such as SEC and AICPA, to restore the trust of investors in corporate firms and audit firms in the US.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The importance of ethics, integrity and professional standards in the audit business.

Keywords

Arthur Andersen, auditing, consulting, ethics, deterioration, culture, 1990, accounting fraud, Enron, clients, closure of Andersen, unethical practices, audit firms, 1990, government, regulatory authorities, SEC, AICPA