ACC618 Week 2 Discussion 1 Arthur Anderson

Although it was immoral on Arthur Andersen’s side as an accounting and consulting business, it should have spoken out against the deception happening at Enron. It need to have followed all applicable rules and regulations. Accounting firm Arthur Andersen should have behaved more responsibly given the importance shareholders placed on the audits they conducted and the annual report they provided on the company’s performance.

But there’s another side to the story: around the time of the Enron and Andersen crisis, most of the top accounting firms were raking in more consulting gigs than auditing gigs. Maintaining a satisfied customer during an audit may be seen as serving the interests of the accounting firm, the client, the public, the firm’s shareholders, the firm’s suppliers, the business’s employees, and the market as a whole, according to the utilitarianism theory. One could therefore argue that accounting companies, in order to maintain their status as trusted consultants, must not always approve of their clients' business dealings.

The firms have a responsibility to safeguard client privacy from a deontological perspective. It was typical practice prior to the advent of SOX compliance for businesses to trash papers rather than give them over to the authorities.

References

Mintz, S. M., & Miller, W. F. (2023). Ethical obligations and decision making in accounting: Text and cases (6th ed.). McGraw Hill Education.

Shorey, L. (2023, January 10). Case Study Analysis. ACC614: Auditing & Fraud Detection.