Arthur Andersen Case Flashcards
Who did Arthur Andersen serve as an outside auditor for?
Enron
How much of Andersen’s profits came form Enron?
Over half
How close were Andersen and Enron?
They were so closely connected that employees from both companies were often not sure who worked for which company
What did the 2 companies do behind the scenes?
They created 2 discretionary accounting areas which made it look like they had a good financial performance
What happened in 2001?
The SEC opened an investigation into Enron and requested documents from Andersen
What did Andersen do when they were informed that the SEC was requesting certain documents?
They started to shred their documents
What did Andersen claim when they were defending their actions?
That document shredding was apart of their routine
What was the result of the Andersen trial?
Andersen was convicted of obstruction of justice and could no longer conduct audits
What was the ethical dilemma in the Arthur Andersen Case?
Should Andersen have shredded the documents when the initial investigation was launched?
