Offered Price $30.00

: Arthur Andersen

Question # 00083644
Subject: Accounting
Due on: 08/21/2015
Posted On: 07/22/2015 12:53 AM

Expert tutors with experiences and qualities
Posted By
Best Tutors for school students, college students
Feedback Score:

Purchase it
Report this Question as Inappropriate











Submission Date



A. Late Submission

· A 10% deduction per day of total coursework marks (excluding weekends and public holidays).

· Late submission between 5 to 10 days, results in a 50% deduction of total coursework marks.

· Late submission past 10 days results in an automatic 0% for coursework and the student will be barred from the final examination.

B. Deliverables

Students must submit all materials supporting their coursework listed in the deliverable section.

  • The coursework must be done individually and must be entirely your own work. Please make sure that you are aware of the rules concerning plagiarism. If you are unclear about them, please consult your program coordinator/lecturer.

.gif" alt="Text box: plagiarism is presenting somebody else’s work as your own. it includes: copying information directly from the web or books without referencing the material; submitting joint coursework as an individual effort; copying another student’s coursework; stealing coursework from another student and submitting it as your own. suspected plagiarism will be investigated and if found to have occurred will be dealt with according to the procedures set down by the university/college.">

  • The coursework should exhibit formal research skills i.e. with a table of content, proper citations, references, and appendices.
  • The coursework write up must be able to demonstrate critical analysis and application of both theory and practical issues to the company that you have selected.
  • Student may include additional relevant data/information apart from the proposed guidelines in conjunction to your research. Additional marks will be awarded for such attempt.
  • A CD containing the softcopy version of your coursework should be submitted as well (if required).



Large number of corporate collapses gave rise to a worldwide scrutiny of the accounting profession and the implosion of Arthur Andersen, a global accounting firm and one of the then Big Five accounting firms.

In May 2001, Sunbeam’s alleged accounting fraud resulted in Arthur Andersen making a settlement for a shareholder suit of $110 million. A month later, Arthur Andersen agreed to pay a $7 million fine after SEC charged it with issuing false and misleading reports bolstering Waste Management by more than $1 billion between 1992 and 1996. Arthur Andersen had also paid part of a $229 million settlement to shareholders of Waste Management. The year 2001 ended with the massive impact of Enron’s bankruptcy in December.

The SEC began its investigation in late October, examining its accounting practices and the performance of Enron’s auditor, Arthur Andersen. The accounting practices being questioned included complex debt hiding schemes using special-purpose entities, manipulation of the Texas power and energy markets, and bribes; its auditor, Arthur Andersen was alleged to have breached its independence by being involved as internal auditor for the company, and by allowing ex-audit partners to take part in its governance. Arthur Andersen was later indicted for its alleged obstruction of justice by destroying Enron documents. The firm was found guilty of a criminal offence in June 2002.

In Enron’s case which involved manipulation of accounting books and the use of accounting services provided by Arthur Andersen as the accountant and management consultant. The company was alleged to have inflated revenues and cash flow figures to boost share prices and to satisfy analysts.

WorldCom was reported to have overstated its cash flow by booking $3.8 billion in operating expenses as capital expenses and provided its founder with a $400 million off-balance sheet loan. The company further stunned Wall Street by announcing it found another $3.3 billion in improperly booked funds, and taking a goodwill charge of $50 billion. The former chief financial officer (CFO) and ex-controller were arrested and charged with criminal activities. WorldCom’s auditor was Arthur Andersen.

Leung, P, Coram, P, Cooper, BJ & Richardson, P ‘Modern Auditing & Assurance Services’ 4th edition, John Wiley & Sons Australia Ltd


Your task is to read the following book;

Toffler, BL & Reingold, J ‘Final Accounting Ambition, Greed and the fall of Arthur Andersen’Currency Doubleday, New York

In addition to the required reading above, you are also required to answer the following questions:

i) Every profession is concerned about the quality of services, and the public accounting profession is no exception. Quality audits are essential to ensure that the profession meets it responsibilities to clients, to the general public and to regulators who rely on independent auditors to maintain the credibility of financial information. To help assure quality audits, the profession and the regulators have developed a multilevel regulatory framework. For the purpose of describing the framework, these activities may be organized as follows:

· Standard setting

· Firm regulation

· Self or peer regulation

· Government regulation

Analyse whether Arthur Andersen had practiced the regulatory framework for ensuring quality services before its doom.

(25 marks)

ii) The word ‘ethics’ is derived from the Greek word ethos, meaning ‘character’. Whereas morality focuses on the ‘good’ and ‘bad’ human behaviour, ethics focuses on what is ‘right’ and ‘wrong’, and how and why people act in a certain manner. It focuses on a study of choices, standards and behaviour.

IFAC’s mission is the worldwide development and enhancement of an accountancy profession with harmonized standards able to provide services of consistently high quality in the public interest. The IFAC Code establishes ethical requirements for professional accountants. A member body or firm may not apply less stringent standards than those stated in the IFAC Code.

The following are the threats to compliance with the Code of Ethics (IFAC Code) by professional accountants in public practice:

i) Self-interest threat

ii) Self-review threat

iii) Advocacy threat

iv) Familiarity threat

v) Intimidation threat

vi) Public practice behaviour

Analyse whether Arthur Andersen had encountered any of the threats above and explain how it was dealt with before its doom.

(25 marks)

iii) In the provision of auditing services, an auditor is liable to compensate a plaintiff if :

· A duty of care is owed to the plaintiff

· The audit is negligently performed or the opinion is negligently given

· The plaintiff suffered a loss as a result of the auditor’s negligence

· The loss is quantifiable

Negligence has been defined as any conduct that is careless or unintentional in nature and entails a breach of any contractual duty. If the auditor has been negligent, then the client may sue the auditor for breach of an implicit term of the contract to exercise reasonable care and skill, so as to recover any consequential loss suffered.

In your opinion, was Arthur Andersen negligent during the provision in its auditing services to its many clients? Please describe the events that demonstrate their negligence.

(10 marks)

iv) Client evaluation is an important element of quality control. (ISA 220.14) states:

The engagement partner shall be satisfied that appropriate procedures regarding the acceptance and continuance of client relationships and specific audit engagements have been followed, and the conclusions reached in this regard are appropriate and have been documented.

The following steps are good practice in accepting an audit engagement:

a) Client evaluation

· Evaluating the integrity of management

· Communicating with existing auditors

· Making enquiries of other third parties

· Reviewing previous experience with existing clients

· Identifying intended users of the audited financial statements

· Assessing a prospective client’s legal and financial stability

· Evaluating the entity’s condition of accounting records and internal control structure.

b) Ethical and legal considerations

· Evaluating independence

· Assessing competence to perform the audit

· Determining ability to use due care

(40 marks)

(Grand total: 100 marks)

Your essay should include:

· Cover Page

· Grading Scheme

· Executive Summary

· Table of Content

· A short description on the background information of Arthur Andersen.

· Answer to the question

· List of References/Bibliography

· Appendices (if relevant)



(1) Your mark in this coursework will carry a 40% weight in the assessment of your overall performance in this module.

(2) You will be working on this coursework individually.

(3) The assignment will be in an essay format of not more than 4,000 words.

(4) Appropriate APA referencing system will be employed where applicable.

(5) Your assignment should be type written, 1 ½ line spaced, font 12 Times New Roman and justify aligned. Please comb bind.

(6) Please provide an executive summary, table of content, page number, proper heading title for each part answered and references.

(7) Use an appropriate cover sheet.

(8) Please attach a copy of the grading scheme at the front of your coursework (after the Cover Page) during submission.

(9) The assignment will be submitted in Week 8 in class.

Assignment of Grades for Written Work

Written assignments will be graded according to the following distribution:

  • Content (thoroughness of preparation, information, and content)
  • Style (grammar, writing quality, clarity of writing at the sentence level)
  • Presentation (organization, clarity of writing at the paper level)

What this means in practice is that if you do the work, but don't organize your thoughts or write clearly, you will end with at most a C. However, you will not be given full credit for content if the lecturer cannot understand what you're saying, so if you don't write clearly, you will probably end up losing points on content as well.


Academic Dishonesty

As stated in the faculty Handbook, cheating, including plagiarism will not be tolerated. All written work, including paper summaries, must be your own work. If you wish to quote a source, you must do so explicitly, and with proper attribution. Any work that does not meet the requirements set out above will be treated as a violation of the academic honesty policy for the class, and dealt with accordingly.

The minimum penalty for a violation of the academic honesty policy is a zero on the assignment. Other penalties may include a letter grade reduction, failing the class, or, in extreme or repeated cases, dismissal from the program/college


Grading Scheme (Coursework)

SUBJECT : _____________________________________

SUBJECT CODE : _____________________________________

PORGRAMME : _____________________________________

STUDENT’S NAME :_____________________________________


Marks Awarded


Regulatory framework for ensuring quality services


Professional ethics and the accountant


The auditor’s legal liability


Acceptance and continuance of client relationships : Client evaluation





Tutorials for this Question
Available for

: Arthur Andersen

Tutorial # 00078330
Posted On: 07/22/2015 12:53 AM
Posted By:
Best Tutors for school students, college students echo7
Expert tutors with experiences and qualities
Feedback Score:
Report this Tutorial as Inappropriate
Tutorial Preview …exhibit xxxxxx research xxxxxx i e xxxx a table xx content, xxxxxx xxxxxxxxxx references, xxx appendices The xxxxxxxxxx write up xxxx be xxxx xx demonstrate xxxxxxxx analysis and xxxxxxxxxxx of both xxxxxx and xxxxxxxxx xxxxxx to xxx company that xxx have selected xxxxxxx may xxxxxxx xxxxxxxxxx relevant xxxxxxxxxxxxxxxx apart from xxx proposed guidelines xx conjunction xx xxxx research xxxxxxxxxx marks will xx awarded for xxxx attempt x xx containing xxx softcopy version xx your coursework xxxxxx be xxxxxxxxx xx well xxx required) BACHELOR xx ACCOUNTING (HONS) xxxxxxxxxx – xxxxxxxx xxxxx number xx corporate collapses xxxx rise to x worldwide xxxxxxxx xx the xxxxxxxxxx profession and xxx implosion of xxxxxx Andersen, x xxxxxx accounting xxxx and one xx the then xxx Five xxxxxxxxxx xxxxx In xxx 2001, Sunbeam’s xxxxxxx accounting fraud xxxxxxxx in xxxxxx xxxxxxxx making x settlement for x shareholder suit xx $110 xxxxxxx x month xxxxxx Arthur Andersen xxxxxx to pay x $7 xxxxxxx xxxx after xxx charged it xxxx issuing false xxx misleading xxxxxxx xxxxxxxxxx Waste xxxxxxxxxx by more xxxx $1 billion xxxxxxx 1992 xxx xxxx Arthur xxxxxxxx had also xxxx part of x $229 xxxxxxx xxxxxxxxxx to xxxxxxxxxxxx of Waste xxxxxxxxxx The year xxxx ended xxxx xxx massive xxxxxx of Enron’s xxxxxxxxxx in December xxx SEC xxxxx xxx investigation xx late October, xxxxxxxxx its accounting xxxxxxxxx and xxx xxxxxxxxxxx of xxxxxxxxx auditor, Arthur xxxxxxxx The accounting xxxxxxxxx being xxxxxxxxxx xxxxxxxx complex xxxx hiding schemes xxxxx special-purpose entities, xxxxxxxxxxxx of xxx xxxxx power xxx energy markets, xxx bribes; its xxxxxxxx Arthur xxxxxxxx xxx alleged xx have breached xxx independence by xxxxx involved xx xxxxxxxx auditor xxx the company, xxx by allowing xxxxxxxx partners xx xxxx part xx its governance xxxxxx Andersen was xxxxx indicted xxx xxx alleged xxxxxxxxxxx of justice xx destroying Enron xxxxxxxxx The xxxx xxx found xxxxxx of a xxxxxxxx offence in xxxx 2002 xx xxxxxxxxx case xxxxx involved manipulation xx accounting books xxx the xxx xx accounting xxxxxxxx provided by xxxxxx Andersen as xxx accountant xxx…
159119_MS_1_159119-16823-1-TM-MF-TTs200912-2275-23.docx (56.04 KB)
Preview: history xxxxx it xxx bowed its xxxxxxxxxx and carved xxxx powerful xxxxxxxxxxxxx xxxx the xxxxxx States But xxxxxx the Enron xxxxxxxx it xxx xxxxxx that xxx firm became xxx away from xxx moral xxxxxxxxxx xxxxx was xxxx down by xxxxxx Anderson It xxx also xxxxxx xxxx “Arthur xxxxxxxx told his xxxxxxxx that they xxxxxx to xxxxx xxxx on xxx needs of xxx public, rather xxxx making x xxxx living xxx I think xxxx idea of xxxxxx tough xxxxxx xxxx a xxxxxxxxxxxx standpoint and xxxxxxxxxx professional responsibilities xxx the xxxxxx xx left xxx firm ” xxxxxxxxxxxx bbc co xxxxxxxxxxxxxxxxxxxxxxxx stm) xxx xxxx the xxxxx these principles xxxxxx to have xxxx eroded xx xxx early xxxxxx a maverick xxxxxxxxxxx named John xxxxxxxx who xxx x company xxxxxxx in cars xxxx the mission xx building x xxxxxxxxxx sports xxx was audited xx the firm xx Andersen xxx xx managed xx turn aside x 17 million xx the xxxxx xx the xxxxxxx through a xxxxxxxxxx company The xxxxxxxxxx warning xx xxxxx was xxxxxxx by Andersen xxxxx made the xx government xxxxxx xxxxx 80 xxxxxxx This made xxxxxxxx suffer, “Andersen xxx banned xx xxx then-Prime xxxxxxxx Margaret Thatcher xxxx doing any xxxx public xxxxxx xxxx in xxxxxxx and was xxxx to pay xxxxxx $60m xx xxx government xxx investor” (http://news xxx co uk/2/hi/business/2147095 xxxx This xxxxxxxxxx xxxxxxx was xxxxxxxxxx that Andersen xxx failed to xxxxxxxx the xxxxxxxxxx xxxxxxxxx in xxxxx to ensure xxxx services Further xxxxxx the xxxx xx Andersen, xxxxxxx scandal was xxxxxxx in the xxxx of xxxxxxxxx xxxxx was xxx Waste Management xxxxxxx in 1990s xxx Waste xxxxxxxxxx xx Chicago xxx the largest xxxxx disposal company xx the xxxxxx xxxxxx In xxx year 1993, xxx management of xxxxx Management xxxxxxxxxx x plan xx increase their xxxxxxxx and in xxxxx to xx xxx they xxx not record xxx expenses of xxxxxxxxx of x xxxxxxxx which xxxxxxxxxxxx enhanced their xxxxxxx For this xxxxxx to xxxxx xxx company xxxxxx Andersen who xxx the auditor xx the xxxx xx sign xxx the accounts xxx Andersen ended xx signing xxx xxxxxxxxx accounts xxxxx contained immaterial xxxxx for four xxxxx For xxxxxxx xxx accounts, xxxxxxxx was paid x 7 5 xxxxxxx for xxx xxxxx work xxx an extra x 12 million xxx consulting xxxx xx the xxxx 1998, when xxx management of xxx company xxx xxxxxxxx they xxxxxxx the fraud xxxxx resulted in xxx price xxxxxxxx xxx the xxxx of investors xx $ 6 xxxxxxx The xxxxxxxxxx xx US xxxxx market and xxx Securities and xxxxxxxx Commission xxxxx xxxxxxxx with xxx record $ x million and xxxx put xx xxxx fraud xxxxxxxxxx against Andersen xx was stated xx Thomas xxxxxxx xxxx “We're xxxxxxx about several xxxxx of mistakes xxx misconduct xxxxx xxx just xx isolated incident" xxxxxxxxxxxx bbc co xxxxxxxxxxxxxxxxxxxxxxxx stm) xxxxxx xxxx threats xx compliance with xxx Code of xxxxxx (IFAC xxxxx xx professional xxxxxxxxxxx in public xxxxxxxx are:Self- Interest xxxxxxxxxxxxx Review xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx.....
159119_16823_1_TM__C_TTs200912-2275-23.docx (54.36 KB)
Preview: of xxxxx Management xxxxxxx which made xxx investors of xxx company xxxx x 6 xxxxxxx and also xx anti fraud xxxxxxxxxx order xxx xxxxxx by xxx Securities and xxxxxxxx Commission of xxxxxx States xxxxx xxxxxxxx were xxxx before the xxxxx scandal produced xx Arthur xxxxxxxx xx the xxxx of WorldCom xxx Enron The xxxxx scandals xxxx xxx enough xxx Arthur Andersen, xxxx the firm xxx again xxxxxxxx xx the xxxxxxx of the xxxxxxx Foundation of xxxxxxx also xxxxx xx BFA xxx successfully defrauded xxx investors of xxx non xxxxxx xxxxxx organization xxxx time again, xxxxxxxx turned a xxxxx eye xxx xxxx was xxxx warned regarding xxx fraud of xxx which xxxx xxxxx two xxxxx back, but xxxxxxxx continued signing xxx books xx xxx until xxx foundation which xxxxxxxxx in the xxxx 1999 xxxx xxxx was xxxxxxxxxx as the xxxxxxx bankruptcy of xx organization xxxxx xxxxxx is xx provide service xxxxxx than profits xx the xxxxxxx xx the xxxxxx States This xxxx made the xxxxx investors xx xxx organization xxxxx $ 600 xxxxxxx Further the xxxx of xxxxxx xxxxxxxx agreed xx out of xxxxx settlement and xxx imposed xxx xxxxxxx penalty xx $ 217 xxxxxxx It was xxxx stated xxxx xxxxxxxxx was xxxxxxxxx to look xx if Andersen xxx the xxxxxxxx xxx scared xx bite the xxxx that fed xx ” xxxxxxxxxxxx xxx co xxxxxxxxxxxxxxxxxxxxxxxx stm) The xxxx imposed a xxxx interest xxxxxxx xxxxx made xxxxxxxx think further xxxxxxxxx its activities xx business xx xxx era xx 1990s The xxxx in the xxx era xxxxxxx xx neglect xxx Code of xxxxxx and its xxxx principles xx xxxx down xx Arthur Andersen xxx started making xxxx in xxxxxxx xxxxxxx which xxxxxx their good-will xxx respect which xxxxxx Andersen xxxxxx xx the xxxx years The xxxx where such xxxx that xxx xxxxxxxxx started xxxxxx faith in xxx company’s in xxxxx they xxxxxxxxx xxx to xxxxxxxxx feature of xxx auditors which xxxxxxxx rather xxxx xxxxxxxx the xxxxxxxxxx of the xxxxx of accounts xxx public xxxxxxxx xxxxxxxx was xxxxxx not promoted xx Andersen, and xxxx a xxxxxxxxx xx the xxxx of the xxxx by signing xxx the xxxxx xxx tampered xxxxxxxx and misguided xxx investors and xxxxxxx stakeholders xxxxxxxx xxxxxx occurs xxxx the members xxx to encourage x position xx xxx point xxxx subsequently the xxxxxxxxxxx had to xxxxxxxxxxx which xxx xxxxxxx for xxxxxxxx as it xxxxxxxxxx did what xxx clients xxxxxx xxx agreed xxxx their accounts xxxxxx than scrutinizing xxx books xx xxxxxxxx and xxxx any irregularity xxxxx editing Further xxx familiarity xxxxxx xxxxx to xxxx place because xx any close xxxxxxxxxxxx with xxx xxxxxxx or xx times when xxx member or xxx management xx xxx firm xxxxxxx too sympathetic xxx familiarity threat xxxxxx at xxxxx xxxx there xx a long xxxxxxxxxxx with business xxxxxxxx which xxxxxxxxxx xxx business xxxxxxxx In the xxxx of Andersen, xxx firm xxx x long xxx close relationship xx Waste Management xxxxxxxx and xxx xx which xxxxxxxx approved the xxxxxxxxxx balance of xxx profits xx xxx company xxx result.....
Purchase this Tutorial @ $30.00 *
* - Additional Paypal / Transaction Handling Fee (3.9% of Tutorial price + $0.30) applicable