AA failed to form a reliable part of the Enron governance system, thereby leaving the directors and other stakeholders at risk. Measures to make a corporate ethical culture are discussed in the text and Chapter PPTs.
I think that other AA partners will be brought to trial, but not many. If possible, a company should keep an electronic record of the file if it cannot keep a tangible one in order to secure itself in future circumstances.
Lay also faces years in prison in a separate case. All 85, of the Arthur Andersens employees and partners worldwide should not have suffered for the actions, or lack thereof, of people. What are the lessons to be learned? This topic is discussed further in Chapter 3. Did those who invested with Madoff have a responsibility to ensure that he was a legitimate and registered investment advisor?
Interestingly, on May 31,the U. How can the board of directors ensure that the operational activities of the company do not subvert proper governance objectives? Shredding Enron Audit Documents: Judgment sampling gave way to statistical sampling, and then to strategic risk auditing.
Should those whistle-blowers each have made more effort to be heard? Some professional accountants did not understand whether they should be serving the interests of current shareholders or future shareholders, or what serving the public interest had to do with serving their client.
Certainly, he knew what a Ponzi scheme was, and that it required continual inputs of new cash to maintain, and that this could not go on forever, given even normal financial cycles.
They did allow him to borrow money for the purpose of buying the largest ranch in Canada, which was also unusual.
Was this an appropriate outcome?
History might have been different if a quality-focused internal control procedure had been in place at AA, rather than one that was revenue focused. This is a case involving a massive fraud and negligence of various government agencies in charge of investor protection.
Reduce tax rates for the general public? He was ordered to stay in the Southern District of Texas or Colorado. As ofthere were over civil lawsuits pending against AA. The generation of revenue became more and more desirable, and the key to merit and promotion decisions.
In the end, an ethical corporate culture is essential to the promotion of whistle blowing and ethical behavior in general. Under what circumstances should audit firms shred or destroy audit working papers?
Probably not, because after the whole scandal of Enron, the work performed by the AA partners under the name of the firm will not be reliable to the users of the financial statements. Keeping records could greatly secure and defend a company.5.
Why didn’t the Arthur Andersen partners responsible for quality control stop the flawed decisions of the audit partners? The Arthur Anderson partners responsible for quality control did not stop the flawed decisions due to lack of courage, as the text states. Why Didn T Arthur Andersen Partners Responsible For Quality Control Stop The Flawed Decisions Of The Audit Partners internal control issues with Arthur Andersen (AA).
Why should an aditor make decisions in the public interest rather than in the interest of management or current shareholders? 8. Why didn't the Arthur Andersen paretners responsible for quality control stop the flawed decisions of the audit partners?
Why didn’t the Arthur Andersen partners responsible for quality control stop the flawed decisions of the audit partners? They tried via memos, but the firm’s governance structure had earlier determined that the audit partner in charge could over-ride them. Clearly, AA’s governing body made the wrong decision.
%(13). Arthur Andersen partners responsible for quality control didnt stop the flawed decisions of the audit partners because of the “tone at the top”. Although some attempts were made, they were vitoed by managment, thus enforcing the aggresive pursuing of revenue by management.
"I just think it got out of control. What it ended up being is greed. Total greed." Andersen's remaining leadership disputed that the firm emphasized the selling of services over audit quality, replacing partners who were strong auditors but didn't generate enough revenue. "Not true," said Andersen spokesman Patrick Dorton, in a written response.Download