Arthur Andersen (B): From Waste Management to Enron Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

The instances illustrate the demise of Arthur Andersen, a company that had long set the industry standard for professionalism in auditing and accounting. Once an example of powerful corporate culture with a devotion to public service and independent integrity, Andersen saw its traditions and standards weaken as it changed its style of governing and grew explosively. The (A) instance describes a disaster precipitated by the entry of Waste Management, a major Andersen client, that it overstated its pretax earnings by $1.43 billion from 1992 to 1996. The resulting Securities and Exchange Commission (SEC) investigation ended with Andersen paying a $7 million fine, the largest ever levied against an accounting firm, and consenting to an injunction that effectively placed the bookkeeping giant on probation. Students guide Andersen leadership and examine the causes of Andersen's problems.

The (B) case covers Arthur Andersen's relationship with Enron, one of the truly amazing success stories of the "new economy" boom. When Enron's aggressive utilization of off-balance sheet ventures became impossible to conceal in autumn 2001, news reports said that Andersen auditors had engaged in extensive shredding of draft files and associated communications with Enron. Pupils are asked to act as disaster management consultants to Andersen CEO Joe Berardino. The (C) case details Andersen's collapse following its indictment and conviction on criminal charges of obstructing justice in the Enron case. Pupils can concentrate on the impact of media on a reputational crisis.

PUBLICATION DATE: October 10, 2011 PRODUCT #: KEL559-PDF-ENG

This is just an excerpt. This case is about FINANCE & ACCOUNTING