ARTHUR ANDERSON

Arthur Anderson

Arthur Anderson

Question 1- Requirements Apply To The Arthur Anderson Case

Mismanagement

Mismanagement Shall be punished by imprisonment of not less than one nor more than four years which, in his capacity as founder, board member or board of directors or supervisory board, manager, administrator or liquidator of a corporation, do , to her detriment or third parties, any of the following acts (Frank and Ken, 2002):

Hide shareholders, partners, associates or interested parties, the real situation of the legal person, falsifying balance sheets, reflecting or failing on the same profits or losses or using any device which involves an increase or decrease of the accounting items.

Providing false information as to the status of a legal person.

To promote, by any fraudulent means, false stock quotes, securities or shares.

OK, being prohibited from doing so, shares or securities of the same legal entity as collateral.

Forging balances to reflect and distribute profits nonexistent.

Skip to communicate to the board, board of directors, and board of directors or similar body, about the existence of vested interests are incompatible with those of the legal person.

Assume corporate loans.

Using one's own advantage or another person's heritage. "

Question 2

In 2002, Arthur Andersen was involved in financial scandal Enron, which led to the cessation of its activities. Thereafter, the societies of Arthur Andersen in the different countries were dissolved and their professional teams merged or were absorbed by other companies.

Arthur Andersen was founded in 1913 by Arthur Andersen and Clarence DeLany under the name "Andersen, DeLany & Co". Andersen was then a professor of corporate finance at the University Northwestern University (near Chicago). His first client was the Schlitz Beer Company brewery in Milwaukee, a city north of Chicago. In 1918 the company name was changed to "Arthur Andersen & Co"(Schroeder and Greg, 2002).

The end of Arthur Andersen was when the company, as auditors of Enron Corporation, was sentenced by federal court in Houston on Saturday, June 16th of 2002, on charges of obstruction of justice, and destruction and alteration of documents related to the bankruptcy of Enron and irregularities committed by the corporation. The fine imposed was about 500,000 U.S. dollars, and also deprived the company to continue in office for audit and consultancy firms listed on the stock market of the United States (McNamee, 2002).

Question 3

Concealment, Omission or Misrepresentation of Information

The director, manager, administrator, legal representative or officer of a bank, financial or other operating with public funds, that in order to conceal illiquidity or insolvency of the institution, omits or refuses to provide information or provides false authorities to control and regulation, shall be punished by imprisonment of not less than two nor more than six years and one hundred and eighty to three hundred sixty-five daily fines (Bryan-Low, 2002).

The punishment for Arthur Andersen was severe since it reduced to a bankrupt company that was part of what was called "the big five". Such advice, Andersen Consulting, having separated from that audit, Arthur Andersen, and having changed its name in January 2001 to become Accenture, escaped punishment (Frank and ...