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Arthur Andersen

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To provide 'reasonable' assurance that financial statements are free from ' ... Large number of regulations covering acceptable procedures. What went wrong? ... – PowerPoint PPT presentation

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Title: Arthur Andersen


1
Arthur Andersen
  • Who audits the auditors?

2
Arthur Andersen Clients
  • Enron
  • Worldcom
  • Global Crossing

3
Role as Auditors
  • To provide reasonable assurance that financial
    statements are free from significant and
    material misstatements
  • Independence is crucial and obligatory
  • Large number of regulations covering acceptable
    procedures

4
What went wrong?
  • Consulting and Auditing together
  • On the Edge Accounting
  • Obstruction of justice destroyed key documents
    in Enron case

5
Results
  • Found Guilt of Obstruction of Justice
  • Defection of accounts
  • Arthur Andersen is poison
  • Over 1.3 Billion in billings lost
  • Forced to stop auditing
  • Ceased Auditing as of August 31
  • Only one person found guilty of obstruction
  • Plead guilty to charges rather than assert his
    5th amendment rights
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