1. What did Arthur Andersen contribute to the Enron disaster? Arthur Andersen made many mistakes that contributed to the Enron disaster. First and foremost Arthur Andersen failed to force Enron to establish internal controls and followed the wishes of the management team. Arthur Anderson also destroyed audit paperwork that showed the issues within Enron that would lead to the disaster.
Yes, he did not conduct himself with the responsibility of a CEO by being fully aware of what was happening in the company. I think that he did not know what was occurring. If he had known, he should have seen that revenues were overstated. This lack of proper governance was a big part of Enron’s undoing. 6.
There has to been beliefs the partners were more motivation by the revenues recognition, overlooking things and providing services to the company. Anderson also should have distinguished the holding of audits clients as a loss of clients would not be good thing to the auditor’s jobs. In Anderson case his internal control, this person should be able to make the decisions. A person who would be more concerned about losses and revenue of their clients. As for the auditor as for themselves standing up for management or clients has become uncertain.
Running Head: Adjustments Assignment 2: North Face, Inc. An auditor must exercise due professional care when conducting an audit engagement. AU Section 316 states, “Because of the characteristics of fraud, the auditor's exercise of professional skepticism is important when considering the risk of material misstatement due to fraud” (AU Section 316, 2002). As the partner in charge, Richard Fiedelman failed to demonstrate these professional standards during his supervision of the audit review of North Face Inc's financial statements for first quarter of 1998. During this audit engagement, Fiedelman failed to accurately document the necessary adjustments that were proposed for the 1997 audit and continued to allow North Face, Inc. to record the barter transaction in a manner that misstated their revenue. The Securities and Exchange Commission (SEC) sanctioned Fiedelman for failing to exercise due professional care and for failing to document the changes that his subordinates had made in the 1997 North Face work papers.
October 25, 2011 Case Study 1.1 Enron Corporation 1. I believe most of the responsible party’s for the Enron crisis would have to be the corporate executives, individual auditors, the leadership of the Anderson firm, and the many regulatory authorities that were involved with the Enron Corporation. I said the many regulatory authorities because they failed to take any proactive measures to limit the ability of rogue corporate executives, accounts, and auditors in their professional responsibilities. Corporate executives would be responsible because they insisted on using aggressive and illegal accounting and financial reporting plans. Individual auditors are responsible because they made unprofessional decisions that tainted the integrity of auditors.
It was Anderson’s responsibility to question any strange circumstances and reports and they failed to do so! 2. The three types of consulting services that audit firms are now prohibited from providing to clients that are public companies are as following: a. Designing information systems for the company: One threat associated with this service is that they would have to assess the system that they had created. This would be very difficult to keep unbiased.
The Ethical Dilemma of Outsourcing. This paper will examine the phenomena of outsourcing from an employee and corporate perspective in an attempt to gain insight into the pros and cons of the outsourcing issue. The researcher proposes that outsourcing is morally and ethically an objectionable practice; the results show little benefit to the company and much harm to the employees it effects. A formal review of the literature available with regards to outsourcing is analyzed, and the case against outsourcing is made. The researcher shows how outsourcing impacts workers in a negative manner, goes against the moral and ethical standards inherent in business and proves that outsourcing will ultimately result in dissatisfaction for corporations in the long term.
With all of those pros to classifying a worker as an independent contractor you have to wonder why businesses choose not to. Along with those many benefits there are also a few disadvantages. Independent contractors, by definition, do not work set hours which means they are free to come and go as they please which could lead to schedule disruption. There are risks of disloyalty to the company that are increased by hiring as an independent contractor because their livelihood is not connected with the business entity. A third major disadvantage is that the “companies may not own the copyrights on materials created by independent contractors” (Durban, 2010).
"1 [6-pt scale. The capital plan. And we rank the board of Southwestern as one of the worst boards within upstream energy. Even with the CEO change, we feel the Chesapeake acquisition and the way they financed it was just border-level incompetence. Our view, we no longer own Southwestern, and one of the reasons we do not own Southwestern is specifically because of senior management and the board.
When the auditors are provided with an incorrect address for Wow Wee’s receivable, the auditors could not contact the client’s customer. They solely rely on the former CFO’s offer to contact the appropriate individual at Wow Wee to ensure that the confirmation was returned to Coopers. However, this is a big mistake because it gives the CFO an opportunity to forge a confirmation. This mistake involves negligence on the auditors because they should be aware of this red flag. It is highly possible for the CFO to forge a confirmation about the accounts receivable.