The job of Arthur Andersen was to make sure that investors could rely on Enron?s financial statements. Although Anderson is the smallest of the ?big five? accounting firms, it is still one of the nation?s largest accounting firms. Many say that after the involvement in the biggest bankruptcy in United States history, Anderson finds them in deep trouble. ?With its reputation badly damaged, Arthur Andersen faces serious problems. Its most talented employees might choose to leave. There is also the possibility of staggering liability claims. The Big Five could possibly become the Big Four? ( ).
One of the questionable facts is towards Arthur Andersen?s independence in the Enron audit. They not only provided Enron with audit services, but also with non-audit services. Anderson was a major business partner, soliciting and selling millions in consulting services to Enron. Anderson was also responsible for some of Enron?s internal bookkeeping. Although questionable, it is far too normal for a big accounting firm, like Anderson, to provide such services to their audit clients.
However, chief executive of Arthur Andersen, Joseph Berardino, suggested that the company might stop selling consulting services to firms it audits.
Former U.S. Federal Reserve Chairman, Paul Volcker has been named to head an ?advisory board? to restore the tarnished image of Anderson. He has stated that auditing is the firm?s ?central and core responsibility.? Since Anderson and other auditors are under fire for alleged conflicts of interest between their duties in reviewing company balance sheets and bidding for lucrative consulting contracts that provide a large portion of their earnings, they have been protesting that auditing remains their primary focus ( ). These firms are actually rallying so that Congress will impose tight restrictions on the amount of non-audit work they do.
As well as the question of...