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Hi, I need help with essay on Andersen LLP: Questionable Accounting Practices. Paper must be at least 1750 words. Please, no plagiarized work!As the discussion outlines integrity and ethics are values
Hi, I need help with essay on Andersen LLP: Questionable Accounting Practices. Paper must be at least 1750 words. Please, no plagiarized work!
As the discussion outlines integrity and ethics are values crucial to any of the firms charged with independent auditing and confirming the financial statements of public corporations. Arthur Andersen LLP, for most of its active business years, exhibited undeniable integrity in the accounting profession. reduction of useful life of mainframe IBM computers (in 1970) for the purpose of depreciation was an outstanding example, which others had to more or less follow.
From this paper it is clear that high profile bankruptcies (or some other troubles) of Andersen client companies in tandem raised questions about the quality and work ethics of the firm. Following companies were in trouble from mid-nineties to August, 2002. Baptist Foundation of Arizona (BFA) filed for Chapter 11 Bankruptcy 1999. Sunbeam Corporation filed a voluntary petition in the U.S. Bankruptcy Court for the Southern District of New York, for chapter 11 bankruptcies, in February 2001. However, in August 2002, Sunbeam came out of Bankruptcy protection. Then, Security and Exchange Commission (SEC) Complaint against Waste Management‘s questionable accounting practices around 2001, had adverse effect on reputation of Andersen. Newly appointed CEO of Andersen LLP, Joseph Berardino, had to had to tackle a number of law suites on behalf of Andersen LLP, relevant to firms auditing practice in the U.S. Andersen paid huge amounts to settle claims by the client companies. Andersen paid $110 million to in May 2002, to settle claims of the Sunbeam investors. Shortly after this, Andersen LLP had to pay $100 million to settle similar claims by investors or shareholders of Waste Management. In the meantime, public discovered the overstatement of earnings by Enron. This was disastrous and it shocked the financial market. Many of the firms, including clients of Andersen were asked to restate earnings.