Arthur Andersen LLP , based in Chicago, is the parent company of America. Previously one of the Big Five accounting firms (along with PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, and KPMG), the company has provided audit, tax and consulting services to large companies. In 2001, it has become one of the largest multinationals in the world.
In 2002, the company voluntarily submitted its license to practice as a Certified Public Accountant in the United States after being found guilty of criminal charges related to the company's audit of Enron, a Texas-based energy company that filed for bankruptcy in 2001. In 2005 , The United States Supreme Court unanimously reversed Arthur Andersen's conviction of a grave error in the instruction of a court judge to a jury convicting the company.
The former consulting and outsourcing practices were separate from the company's accounting practices in 1987, separated from Andersen Worldwide in 2000, and renamed Accenture. It continues to operate.
Video Arthur Andersen
History
Establishment
Born May 30, 1885 in Plano, Illinois, and an orphan at the age of 16, Arthur E. Andersen began working as a postman at noon and went to school at night, eventually employed as assistant financial supervisor of Allis-Chalmers in Chicago. In 1908, after attending a course in the evening while working full-time, he graduated from Kellogg School at Northwestern University with a bachelor's degree in business. In the same year, at the age of 23, he became the youngest CPA in Illinois.
Company Arthur Andersen was founded in 1913 by Arthur Andersen and Clarence DeLany as Andersen, DeLany & amp; Co. The company changed its name to Arthur Andersen & amp; Co. in 1918. Arthur Andersen's first client was Joseph Schlitz Brewing Company of Milwaukee. In 1915, because of the many contacts there, Milwaukee's offices opened as the offices of both companies.
Andersen has an unwavering belief in education as a foundation that must be developed by the new accounting profession. He created a professional centralized training program and believed in training during normal business hours. He is generous in his commitment to help educational organizations, citizenship, and charities. In 1927, he was elected to Northwestern University's Board of Trustees and served as its president from 1930 to 1932. He is also chairman of the Illinois certified public accountant's test board.
Reputation
Andersen, who headed the company until his death in 1947, is a strong supporter of high standards in the accounting industry. A tightening for honesty, he argues that accountant's responsibility is to investors, not their client's management. During his early years, it was thought that Andersen was approached by an executive from a local rail utility to sign on accounts containing defective accounting, or face the loss of large clients. Andersen refused uncertainly, answering that there was "not enough money in Chicago" to get him to do it. For years, Andersen's motto was "Think straight, speak straight."
Arthur Andersen also leads in a number of areas of accounting standards. Being one of the first to identify possible sub-prime bust, Arthur Andersen broke away from a number of clients in the 1970s. Then, with the advent of stock options as a form of compensation, Arthur Andersen was the first of the major accounting firms to propose to the FASB that stock options should be included in the expense report, thereby impacting net income such as cash compensation.
In the 1980s, standards across the industry declined as accounting firms struggled to balance their commitment to audit independence against a desire to grow their growing consulting practice. After building a reputation for IT consultants in the 1980s, Arthur Andersen was no exception. Companies are rapidly expanding their consulting practices to the point where most of their revenue comes from such engagement, while audit partners are encouraged to seek opportunities for consultation fees from existing audit clients. In the late 1990s, Arthur Andersen managed to triple the per-share earnings of his partners.
Predictably, Arthur Andersen struggled to balance the need to maintain his loyalty to accounting standards with his client's desire to maximize profits, especially in the era of quarterly earnings reports. Arthur Andersen has been allegedly involved in fraudulent accounting and auditing of Sunbeam Products, Waste Management, Inc., Asia Pulp & amp; Paper, Arizona Baptist Foundation, WorldCom, as well as the famous Enron case, among others.
Two of the last three General Supervisors of the US General Accounting Firm (now the Government Accountability Office) are top executives Arthur Andersen.
Andersen Consulting and Accenture
The company's consulting wings became increasingly important during the 1970s and 1980s, growing at a much faster rate than more established accounting, audit, and tax practices. This disproportionate growth, and the trust of consulting division partners that they did not get a fair share of the company's profits, created an increasing friction between the two divisions.
In 1989, Arthur Andersen and Andersen Consulting became separate units of Andersen Worldwide SociÃÆ' © tà ©  © CoopÃÆ' © rative. Arthur Andersen increased the use of accounting services as a springboard to enroll clients for more profitable business Andersen Consulting.
Both businesses spent most of the 1990s in fierce disputes. Andersen Consulting sees a big jump in profits over the decade. The consultants, however, continue to hate the transfer payments they have to give to Arthur Andersen. In August 2000, at the conclusion of the arbitration of the International Chamber of Commerce of the dispute, the arbitrators gave Andersen Consulting its independence from Arthur Andersen, but gave US $ 1.2 billion in previous payments (held in escrow pending) to Arthur Andersen, Andersen Consulting can no longer use Andersen's name. As a result, Andersen Consulting changed its name to Accenture on New Year's Day 2001 and Arthur Andersen temporarily now owns the rights to Andersen Consulting's name to "Andersen".
Four hours after the arbitrator made his decision, CEO Arthur Andersen Jim Wadia suddenly resigned. Industry analysts and business school professors both viewed the event as a full win for Andersen Consulting. Jim Wadia will provide insight into his retirement years later on Harvard Business school case activities about disunity. It turns out that the board of Arthur Andersen issued a resolution saying he should resign if he did not get at least an additional $ 4 billion (either through negotiation or by arbitrator's decision) for a consultation practice to secede, then resignation as soon as the decision was announced.
Accounts vary as to why divisions occur - executives on both sides of the split cite greed and arrogance on the other. The executives on the Andersen Consultation side maintained contract violations when Arthur Andersen created a second consulting group, AABC (Arthur Andersen Business Consulting) who competed directly with Andersen Consulting in the market. AABC is growing rapidly, especially health care practices and technology. Many AABC companies were purchased by other consulting firms in 2002, notably Deloitte (mainly in Europe), Hitachi Consulting, PwC Consulting, which was later acquired by IBM, and KPMG Consulting, which later changed its name to BearingPoint.
Enron scandal
Following the 2001 scandal in which Enron, the energy giant, is known to have reported $ 100 billion in revenues through systematic and systematic accounting fraud, Andersen's performance and his alleged involvement as an auditor are under close scrutiny. The Power Committee (appointed by Enron's board to look into accounting firm in October 2001) came to the following assessment: "The evidence available to us indicates that Andersen did not fulfill his professional responsibilities in connection with the audit of Enron's financial statements, or his duty to draw the Council's attention Enron (or Audit and Compliance Committee) concerns Enron internal contracts on related party transactions ".
On June 15, 2002, Andersen was convicted of obstruction of justice for tearing up documents related to his audit of Enron, which resulted in the Enron scandal. Although the Supreme Court reversed the company's conviction, the impact of the scandal combined with the findings of criminal involvement ultimately destroyed the company. Nancy Temple (in the corporate legal department) and David Duncan (key partner for Enron accounts) are cited as managers responsible for the scandal because they ordered subordinates to destroy relevant documents.
Because the US Securities and Exchange Commission will not receive audits from convicted prisoners, the company agrees to submit the CPA license and its right to practice before the SEC on August 31, 2002 - effectively getting the company out of business. It had already begun to ease the American operation after the indictment, and many of his accountants joined other companies. The company sold most of its operations in America to KPMG, Deloitte & amp; Touche, Ernst & amp; Young and Grant Thornton LLP. Damage to Andersen's reputation also destroys the company's international practice. Most of them are taken over by local companies from other large international accounting firms.
The indictment also highlights wrong corporate audits from other companies, especially Waste Management, Sunbeam, Baptist Foundation of Arizona, and WorldCom. The next bankruptcy of WorldCom, which quickly surpassed Enron as the largest bankruptcy in history (and has since been endorsed by the bankruptcy of Lehman Brothers and WaMu in the 2008 financial crisis) caused a domino effect from accounting and corporate scandals.
On May 31, 2005, at Arthur Andersen LLP v. United States , the United States Supreme Court unanimously reversed Andersen's conviction of a serious error in the judges' judge's jury instructions. The Supreme Court declared that the instructions were too vague to allow the jury to find that a barrier of justice had taken place. The court found that the instructions were written in such a way that Andersen could be punished without proof that the company knew it was unlawful or that there was a connection with a formal process that prohibited the destruction of documents. The opinion, authored by Chief Judge William Rehnquist, also expressed skepticism over the government's concept of "corrupt persuasion" - persuading a person to engage in actions with improper ends without knowing that the action was unlawful.
Demise
Since Andersen's vacancy was vacated, theoretically leaving Andersen free to continue operations. The damage to Andersen's name is so severe, however, that it has not returned as a viable business even on a limited scale. There are more than 100 pending civil lawsuits against companies related to its audit of Enron and other companies. Even before voluntarily giving up his right to practice before the SEC, many state licenses were revoked. The new verb, "Enron-ed", was created by John M. Cunningham, former Director of Arthur Andersen at the Seattle Office, to describe the death of Arthur Andersen.
Of the 28,000 employees in the United States and 85,000 people worldwide, the company is now down to about 200, especially in Chicago. Most of their concern is on handling lawsuits and leading orderly disbursement of companies.
In 2011, Arthur Andersen LLP has not been officially disbanded or has been declared bankrupt. The ownership of the partnership has been submitted to four limited liability companies called Omega Management I through IV. Arthur Andersen LLP operates a Q Center conference center in St. Petersburg. Charles, Illinois to day-to-day management is submitted to Dolce Hotels and Resorts in 2014, but Andersen retains the ownership of Center Q currently used for training, especially for internal Accenture personnel, and other large-scale companies.
Partner and local office migration to new company
Many partners form new companies or acquired by other consulting firms. Examples include:
- Accuracy established in 2004 by a team of seven former partners and headquartered in Paris.
- Andersen Tax LLC obtaining the rights and changing its name from WTAS in 2014.
- BearingPoint, formerly a US consulting unit separated by KPMG, who bought Andersen's business consulting practice in France and Spain
- Huron Consulting Group
- West Monroe Partners founded in 2002 by four former consultants, and based in Chicago.
- KPMG which absorbs Computer Forensics division based in Cypress, CA and Boise, Kansas City, Philadelphia, Portland, Salt Lake City and Seattle offices, among others
- Navigant Consulting that absorbs eleven partners in Chicago and Washington D.C.
- Management Solutions
- Perot Systems that absorbs six partners in the East
- Protiviti employs about 800 former workers
- SMART Business Advisors and Consultancy that absorb some of Philadelphia offices
- jcba Limited established by partners from aviation practice
- Grant Thornton International that absorbs North Carolina, South Carolina and Tulsa offices.
- True Partners Consult
- Part of Audit Andersen's practice of joining Deloitte and Ernst & amp; Young.
Maps Arthur Andersen
See also
- Andersen Tax LLC
- Accenture
- The accounting scandal
- Conspiracy of Fools
- Company violation
- David J. Lesar
- Enron scandal chronology
References
External links
- US. official website
- US indictment v. Arthur Andersen, LLP.
- Supreme Court Cancels Conviction in Arthur Andersen LLP, Applicant v United States
- Arthur Andersen and Baptist (Salon.com)
- Arthur Andersen's Inheritance (Book)
- Inside Arthur Andersen: Moving Values, Unexpected Consequences (Books)
Source of the article : Wikipedia
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