The Audit Profession
This is the accounting standard and practice that is used in all financial statement reporting by many firms.
What is GAAP (Generally Accepted Accounting Principles)?
(Learned in accounting classes!)
A former Northwestern professor, this person founded the international accounting and consulting firm from the case in 1913.
Who is Arthur Andersen?
The new firm that was the umbrella that encompassed both Arthur Andersen and Andersen Consulting.
What is Andersen Worldwide SC?
(What was the reason for this?)
An important client for Andersen, when this energy giant filed for bankruptcy, it was the biggest bankruptcy filing in history.
What is Enron?
(Why do you think Enron is still important today?)
Arthur Andersen, Deloitte & Touche, Ernst & Young, KPMG Peat Marwick, and PricewaterhouseCoopers are named this nickname.
What is the Big Five?
This is the examination of a company's financial statements and the accounting systems, controls, and records that produce them.
What is an audit?
(Who is interested in audit in the future?)
These two values became the trademarks for Arthur Andersen and his accounting firm.
What is honesty and integrity?
(Why do you think the firm chose these two values?)
This practice of Arthur Andersen ultimately became the most profitable practice of the entire company!
What is the consulting practice?
(Who is interested in consulting?)
Enron was deemed this category in Andersen's risk profile.
What is maximum risk?
(What were the other risk categories?)
Today, Deloitte, PwC, KPMG, and EY make up this group.
What is the Big Four?
(Who is interested in a career with the Big Four?)
This is the purpose of an audit.
What is to ensure that the financial statements have been prepared in accordance with generally accepted accounting principles (GAAP)?
(Variations of above are acceptable)
This senior partner at Arthur Andersen took up the role of CEO after the founder died. During his tenure, Paul Volker referred to Andersen as the "gold standard" for accounting firms.
Who is Leonard Spacek?
This organization allowed audit firms to advertise and compete aggressively with one another for clients.
What is the Federal Trade Commission?
(What are other roles of the FTC?)
Andersen agreed to a $217 million class-action settlement with this firm's shareholders over its audits.
What is the Baptist Foundation of Arizona (BFA)?
When interviewed by a reporter, the newly appointed CEO of Andersen Worldwide Aldo Cardoso said these infamous words.
What is "Andersen is dead?"
Investors and other users expect auditors to bring these to the financial reporting process? (Name two)
What are integrity, independence, objectivity, and technical competence?
(Why do you think these are important to an auditor?)
This is the firm Arthur Andersen's motto.
What is "Think Straight, Talk Straight?"
This doctrine allowed investors of companies to rely solely on the stock price in investment decisions rather than questionable financial information.
What is the fraud-on-the-market doctrine?
Andersen was charged with knowingly or recklessly issuing what kind of reports on Waste Management's annual financial statements.
What are false and/or misleading unqualified audit reports?
After splitting up Arthur Andersen Worldwide, Andersen decided to take part in a new initiative that involved things from e-business consulting to direct investment in start-ups in this region.
What is Los Angeles?
These types of people rely on auditors to perform their jobs effectively and fairly before making decisions.
Who are investors and creditors?
(Why do you think investors and creditors need accurate information?)
This organization was created by Leonard Spacek to set accounting and ethical standards.
What is the Accounting Principles Board?
After splitting off from Arthur Andersen, this new consulting firm rebranded itself under this new name.
What is Accenture?
(Anybody interested in working at Accenture or consulting in general?)
In Waste Management audit failure, the decision to go along with the client's financials were backed by the highest levels of Andersen's Partners in this city's headquarter.
What is Chicago?
This Andersen partner was charged with the felony of obstructing justice by shredding Enron-related documents.
Who is David Duncan?