5. Did Arthur Andersen behave ethically? If not, why not?
As far as I am concerned Arthur Andersen is just as guilty, if not more, than Ken Lay, and Jeff Skilling. He was acting in his own interest, and to save an important client. They paid him almost $52 million in the year 2000, I think it is obvious that they were paying him off to keep their sketchy business practices under wraps. An auditor is supposed to review physical assets, journals and ledgers, and board minutes to ensure that all activity with significant financial implications is adequately disclosed in the financial statements. After reading this case, I can safely say that this was not the what was happening.
Monday, October 1, 2007
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3 comments:
Evan Gaffny: question 5. Did Arthur Andersen behave ethically? if not, why not?
No Arthur Andersen did not behave ethically. Andersen knew what was going on within the company and did not red flag the company because of lucrative payouts. In 2000 Enron paid Andersen $25 million for auditing and $27 million for consulting, $52 million sounds a little steep for someone just to audit and consult a company. Also if Andersen had nothing to hide and the problem with Enron did not come up then he would not have had his employees shred documents related to Enron's audit.
5. Did Arthur Anderson behave ethically? if not why not?
No Arthur Anderson did not behave ethically based of what i read in the book. Anderson was paid large amounts of money for auditing and consulting, or also known as keeping Enron;s secret quiet. If this wasnt the case he would not have shredded the audit documents.
Also based off of our codes of ethics for the class Anderson broke three of them. He was not honest about what was going on within the company, he did not respect his employees, and there was no trust present. This is another reason why Anderson was not behaving ethically.
Arthur Andersen could not behave ethically.
He has been dead for 60 years!
You may want to look it up:
http://en.wikipedia.org/wiki/Arthur_Andersen
Check if you read the right book (the spelling is Andersen, not Anderson.)
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