Arthur Andersen LLP was the auditor for Enron WorldCom Waste Management

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Discussion 1

Arthur Andersen LLP was the auditor for Enron, WorldCom, Waste Management and other companies that committed fraud. Andersen was forced to shut its doors forever after a U.S. Department of Justice lawsuit against the firm charged that it had obstructed justice and lied to the government in the Enron case. One thing Andersen had done was to shred documents related to its audit of Enron before the government could get its hands on them. Some in the profession thought the government had gone too far given the facts and mediating circumstances including top management’s deception; others believed the punishment was unjustified because most accounting firms got caught up in similar situations during the late 1990s and early 2000s (pre-Sarbanes-Oxley). What do you believe? Use ethical reasoning to support your answer.

Discussion 2

Interpretation 102-4 of the AICPA Code of Professional Conduct that was discussed in Chapter 1 provides that a CPA should not knowingly misrepresent facts or subordinate her judgment when performing professional services. Explain how Rest’s model of moral development influences the steps a CPA should take to avoid subordinating professional judgment.

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Discussion 1.
The basic essence of creating laws is to protect the general harmony of society. The laws carry
with them various measurements of punishments for those who violate them. It is important to
note that these laws and the type of punishment meted to offenders differ with jurisdictions. (King
215-215) In the case of Arthur Andersen LLP, there is no question that in accordance with the laws
at that time, he did a wrong thing by shredding documents that carried important information
regarding the audit of Enron. This goes contrary to the provision of ethics, integrity, and honesty.
The government must have argued the\at Anderson committed the act in order to destroy important
evidence that would probably incriminate the company in question. Therefore the scenario only
points to a corrupt dealing, at least from the government's perspective.
However, some of ...

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