The cases describe the death of Arthur Andersen, a firm that had long set the industry standard for professionalism in accounting and auditing. Once an example of strong corporate culture with a dedication to public service and independent ethics, Andersen saw its culture and standards weaken as it shifted its manner of governing and grew. The (A) case describes a disaster precipitated by the admission of Waste Management, an important Andersen client, that it overstated its pretax earnings by $1.43 billion from 1992 to 1996. The consequent Securities and Exchange Commission (SEC) investigation finished with Andersen paying a $7 million fine, the largest ever levied against an accounting firm, and consenting to an injunction that effectively set the accounting giant on probation. Students analyze the causes of the problems of Andersen and guide Andersen leadership. 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 usage of off-balance sheet partnerships became impossible to conceal in autumn 2001, news reports said that Andersen auditors related communications with Enron and had participated in extensive shredding of draft documents. Students are asked to act as disaster management consultants to Andersen CEO Joe Berardino. Pupils can focus on the effect of media on a reputational crisis.
PUBLICATION DATE: November 03, 2011 PRODUCT #: KEL560-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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