In previous essays we have discussed the context in which Enron found itself during the 1990s, an environment friendly to managers who chose aggressive accounting maneuvers; we have described the crimes themselves; we have looked at the gargantuan transformation of the auditing profession; and we have examined what Arthur Andersen did not do in its [...]
The Big Four accounting firms (Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers) have filled the popular press this past year with numerous examples of their poor auditing practices. But the past month has been particularly bad for these “’gatekeepers’ to the public securities markets.”
Arthur Andersen was not a hapless bystander when Enron’s managers committed their accounting frauds, nor was it a duped auditor, nor an innocent victim of the media. Perhaps it was a scapegoat as all the large firms have engaged in audits of less than stellar quality, but that does not excuse its poor performance at [...]
We already have discussed the context for Enron’s crimes by describing the Roaring Nineties as a period of accounting exaggeration and worse. We then referenced the first SEC filing that confessed some of the crimes by Enron’s managers. In this and the next essay, we turn our attention to the auditor Arthur Andersen; specifically, we [...]
Poor Jon Corzine! What a pity his firm declared bankruptcy on Halloween. Because he has no more tricks to play, he will be receiving few treats.