Andersen’s Tolerance Toward Aggressive Financial Reporting: Are They Different?

Over the last two years, the public press has expressed differing views on whether the demise of Arthur Andersen is an anomaly or a systematic problem in the profession. Some authors have asserted that Arthur Andersen was a firm somehow different than the other Big Five accounting firms while others in the public press believe that the failure of Andersen is the outcome of a systematic problem in the accounting profession. In this study, I examine whether there is a difference between the tolerance of Arthur Andersen and the tolerance of the other Big Five accounting firms toward aggressive financial reporting. I find that there is no difference between the tolerance of Arthur Andersen and the tolerance of the other Big Five accounting firms toward aggressive financial reporting

Hourglass award won by Leonard Spacek

Leonard Spacek, a retired partner with Arthur Andersen & Co., is this year\u27s recipient of the prestigious Hourglass Award for his book and videotape entitled The Growth of Arthur Andersen & Co., 1928-1973, an Oral History. The Hourglass Award is presented annually to a person(s) who has made a significant contribution to the study of accounting history

The effect of SOX on audit quality

© 2019, Emerald Publishing Limited. Purpose: This paper aims to investigate two issues. First, the authors test the effect of the Sarbanes–Oxley Act (SOX) on audit quality after 10 years. Second, the authors test whether it was necessary to close all of the Arthur Andersen offices due to the misbehavior of a few (e.g. the Houston and Atlanta offices). Design/methodology/approach: The authors have used conservatism (Basu) as a proxy for audit quality. Findings: The authors find that, over the long run (10 years) after SOX adoption, there is a significant positive change in conservatism as compared to during the previous similar period. In addition, the authors find that only 6 of the 20 city-level offices of Arthur Andersen were less conservative than were their other Big 6 competitors in the same city. Furthermore, the results also suggest that some city-level offices of Arthur Andersen were engaged in more conservative accounting practices than were their competitors and the Houston Andersen offices. Originality/value: This study documents, using empirical evidence, that the implementation of SOX is successful, and that one factor that helped lead to this success might be the harsh punishment on Arthur Andersen

International Effects of the Andersen Accounting and Auditing Scandals: Some Evidence from the US, UK and Australian Stock Markets

In this paper, we use event study methodology to examine the effect of two highly publicized accounting failures, at Enron and WorldCom both audited by Arthur Andersen, on the total stock returns of some companies in the UK also audited by Arthur Andersen. The results vary substantially between countries. We find no evidence of a significant impact in the UK or US. There is some evidence of negative abnormal returns at the time of the Enron scandal in Australia. However, this reaction was very short-lived and the negative abnormal returns on the stocks of Andersen-audited companies had been fully recovered within a week. Our results suggest that sharing an auditor with a firm that has issued corrections to accounts which have previously received an unqualified audit opinion does not significantly affect market perceptions of firms’ value, which suggests that the choice of auditor has little, if any, impact on market perceptions of the reliability of published financial information. Key words: Accounting scandals, Enron, WorldCom, Event study, International Stock Markets.

Independence: The Fall Of Andersen And The Rise Of Sarbanes Oxley

In this study, the author examines the audit firms’ fees associated with audit services and audit-related services as a percentage of total fees charged to individual firms as reported to the SEC.  This study was motivated by discussion of the impacts on audit opinions of the amount of work beyond an audit for which an auditing firm contracts.  The results indicate that the fees that Arthur Andersen charged its individual clients indeed had a lower percentage of total fees associated with audit work.  Further, for the year 2002, on average, firms reported a higher percentage of fees from auditors were associated with audit work.  Firms that previously contracted with Arthur Andersen contracted significantly less non-audit services than their counterparts

IN MEMORIUM: GEORGE ROUDEBUSH CATLETT (1917-2013)

George R. Catlett, the senior technical partner of Arthur Andersen & Co. from 1962 to 1980, died on October 10, 2013 in Pewaukee, Wisconsin. He was born on August 14, 1917 in Fairmount, Illinois, where he grew up

University of Dayton Business Ethicist Boggled by Andersen\u27s Actions, Enron\u27s Managerial Arrogance

News release announces that having Arthur Andersen act as both Enron Corp.\u27s auditor and financial consultant is analogous to allowing a lawyer to represent the plaintiff and the defendant in the same case, according to John Quinn

In all my years

A quick summary of Eric L. Kohler\u27s observations, participation, and survival in the midst of dynamic undercurrents during the 1920\u27s and early 1930\u27s, featuring the reform work of Durand W. Springer, Arthur Andersen, and the American Association of University Instructors of Accounting