Free

Legal And Ethical Issues Of The Audit Of Industries - Essay Example

Comments (0) Cite this document
Summary
The writer of the paper "Legal And Ethical Issues Of The Audit Of Industries" gives information about ethical issues that can be found upon reviewing Arthur Andersen. There are three major ethical issues that can be established by reviewing the said company…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.8% of users find it useful
Legal And Ethical Issues Of The Audit Of Industries
Read TextPreview

Extract of sample "Legal And Ethical Issues Of The Audit Of Industries"

Legal And Ethical Issues Of The Audit Of Industries
Question # 1
What legal and ethical issues are present as you review Arthur Andersen’s role in the audit of a number of scandal-plagued industries? Explain in detail.
There may be a lot more ethical issues that can be found upon reviewing Arthur Andersen. However, there are three major ethical issues that can be established upon reviewing the said company. The first issue arose when Arthur Andersen provided accounting, business consulting, and auditing services to the same company (citation). These services should not be practiced since there will be conflict of interest especially providing both accounting and auditing services. There will be danger of committing biases when providing the services and will eventually lead to unethical acts within the company.
The second issue that can be considered ethical is when the company withheld, covered up and overlooked discrepancies in the company’s record (citation). The company was found to cover up and did not disclose accounting discrepancies of companies in which they provided their services. Evidences were obtained that suggest such acts were committed by Andersen.
The third ethical issue that is present in the Andersen case is the company’s act of destroying evidences that can be used against them (citation). Ten days just before the U.S. Securities Exchange Commission formally started the investigation again Arthur Andersen, the management instructed their employees to destroy all potential evidences that may prove their illegal actions. This act can be said to be legally wrong too. This is a form of obstruction of justice because the company did not disclose evidences that will help the investigation become successful.
Question # 2
What role did Arthur Andersen’s culture play in their business?
Arthur Andersen was one of the top accounting firms and considered to be one of the “Big Five” in the United States (citation). The company employed 28,000 people in the United States and 85,000 employees globally (citation). Being a very powerful and big company, Arthur Andersen was considered to be responsible in promoting unethical auditing methods with its actions. Because of these methods, thousands of employees lost their jobs and multi-million of dollars were lost by the shareholders and employees.
Question # 3
How would have the Sarbanes-Oxley Act will help minimize the likelihood of other accounting practices happening?
Sarbanes-Oxley Act is the act passed by the Congress to “establish a system of federal oversight of corporate accounting practices” (citation). Because of this act, the accounting firms will be evaluated and monitored according to the established standards and rules of accounting firms. This act created the Public Company Accounting Oversight Board which is tasked to monitor the accounting firms (citation). Because of this law, the accounting firms will not provide both the auditing and consulting services to the same company as what Andersen did. This act will eliminate the conflict of interest. Thus, because of the passage of the act, unethical auditing methods will be eliminated and shareholders will gain confidence back and will soon invest to more efficient and effective accounting firms.
Question #4
As an ethics consultant, what recommendations would you have made to the partner’s at Arthur Andersen?
As an ethical consultant, I would have recommended to the partners of Arthur Andersen to eliminate and avoid any unethical methods and practices from the very beginning. They should have made an action to prohibit such acts in the very first place. If they knew about the said commission of unethical, if not illegal, methods, they should have come to the proper authority and reported about the issue. The proper authority will surely advice them about the proper procedure of what to do next. If only they have done what is right, they would have not lost multi-million investments. Laws were made to be followed based on fairness and justice. If they committed a violation of the law, they will face consequences. Thus, as an ethics consultant, I would have surely pushed the partners to follow the established laws and rules and if Andersen will not do so, they should have pulled out their shares earlier.
Reference: Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Legal And Ethical Issues Of The Audit Of Industries Essay”, n.d.)
Retrieved de https://studentshare.org/business/1391549-ethics
(Legal And Ethical Issues Of The Audit Of Industries Essay)
https://studentshare.org/business/1391549-ethics.
“Legal And Ethical Issues Of The Audit Of Industries Essay”, n.d. https://studentshare.org/business/1391549-ethics.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Legal And Ethical Issues Of The Audit Of Industries

Work related legal/ethical issues

...? Work Related Legal/Ethical Issues This paper discusses ethical issues of doing business. Whenever engaged in any kind of business, there is the need to adopt all ethical issues which ensure that the business will be able to realize its goals. Ethical responsibility improves operations of businesses hence making partnering much convenient for businesses reading from the same script. Very many considerations are very important in business operations, and especially when operating globally. Introduction Ethical responsibility is a contentious issue in which people behave...
11 Pages(2750 words)Research Paper

Legal and Ethical Issues

...? Smoking in care setting for older people: legal and ethical issues Introduction In accordance with the report prepared by the Centres for Disease Control and Prevention (CDC) and the National Association of Chronic Disease Directors, nearly 13 million British smokers are people who are older than 50 years (Draft National Quality Standards, 2007). In the UK there was an essential drop of smokers’ rate after a smoking ban was acclaimed in 2007 (Draft National Quality Standards, 2007). A more scaring fact is that nearly 70% of deaths among older people in America and the UK resulted from smoking (Draft National Quality Standards, 2007). Therefore, social and medical workers direct all...
6 Pages(1500 words)Essay

CSR of Google Company

..., Google Company has indicated that crime pays if a business has the market power. Google Company has been charged with theft of property by other industries, of which, it is settling the cases. This is also evident since National Legal and Policy Centre, which is an independent body, has excoriated the company for disregarding other industries’ property. The company has been recorded a high fraud rate in the internet industry through stealing from its advertisers. It has been noted not to fight click fraud cases. Recommendations In order to address the above highlighted issues, the Google Company can take several courses of action in order to address the...
6 Pages(1500 words)Essay

Legal & Ethical Issues in Nursing

...? Legal & Ethical Issues in Nursing Principles of Patient Safety Patient safety emphasizes on reporting, prevention and investigation of errors within the medical field that lead to adverse healthcare events. Such errors can be caused by human factors, medical complexity and system failures (Ginny, 2010). In the case study presented, the principles of protection of safety of the patient are as follows: The first principle is that security safeguards should be effected to protect the patients' health, and this happens when transporting Antonia to hospital from the convenience store where he was in confusion. The second principle implies that, under some circumstances, the physicians can...
3 Pages(750 words)Essay

Legal and Ethical Issues

...Describe the legal issues that are involved in this case Tatiana was killed by Prosenjit Poddar in Oct, 1969. The parents of the victim reported through that Poddar confessed his crime to Dr. Lawrence Moore, a psychologist employed by the Cowell Memorial Hospital at the University of California at Berkeley. The parents also claimed that the psychologist deliberately avoided the revelation of the details to the court and public. Legally, the case was stronger for the parents, and it seemed that it was rational for them to protest and seek punishment against the murderer and the person who deliberately hide the identity of the murderer. Legally Poddar was under...
5 Pages(1250 words)Case Study

Ethical and Legal Issues

...in how the consent is made. In the earlier discussions, consent has to be acquired clearly and the individual has full knowledge of the facts and possible effects and ramifications of his giving his personal information for sale. The supermarket would not have satisfied the legal and ethical requirements, as we simple go there to shop. Indeed, by analyzing our receipts and past purchases and piecing them together with our financial information through our payments, credit card use, etc., the supermarkets have as much information as they or anyone else would need to take advantage of the information we unwittingly give them. There is presumably an element of trust involved when we make purchases at our...
7 Pages(1750 words)Essay

Auditing

...practice Notes that were good practice guidelines intended to assist auditors in applying auditing standards for particular circumstances or industries. Since 1991, UK auditing standards have been issues by the Auditing Practice Board (APB) that was established by the Consultative Committee of Accountancy Bodies (CCAB). In 1991, APC Practice Notes were adopted by the APB and remain in force until replaces by a SAS or APB Pracxtice Note or Bulletin. In 2004, the Fiancial Reporting Council (FRC) took over the responsibility for the setting of audit standards through the APB which became a subsidiary board of the FRC. The FRC is also...
7 Pages(1750 words)Essay

Legal and Ethical Issues

...LEGAL AND ETHICAL ISSUES IN NURSING of Health Insurance Portability and Accountability Act (HIPAA) is designed toenable the researchers to obtain Protected Health Information in the course of their research. These researchers include those in medical and other health related disciplines. They require access to certain information about heath that people may view as private and intend it to be confidential. The information is contained in disease registries, government archives of important medical records and other databases that contain hospital discharge records. The HIPAA rules are a response to public concern over potential abuses of the privacy of health information. To understand...
2 Pages(500 words)Research Paper

Ethical and Legal Issues

...Ethical and Legal Issues A policy restricting employee internet use is ethically sound. Employee monitoring has appeared as a requirement, and it is still a controversial issue because of widespread use and complexity of technology. Employees are apprehensive of Code of Conduct compliance and proper employee behavior relative to their industries and other organizations. This is the reason why more and more employers are utilizing monitoring devices to keep track or check the actions of their employees. Most of the employers feel that too much utilization of internet for activities that are not job related while on the job is not...
2 Pages(500 words)Assignment

Legal and Ethical Issues

...The legal and ethical issues surrounding Solyndra Introduction Solyndra is a solar energy manufacturing company founded in the year 2005 by Granet. It focused in the manufacture of tubular solar panels which were very competitive in the solar industry market (David 2008). Its processes were well flowing for the first five years. On 31st Aug 2011 when it filed for chapter 11 bankruptcy, 24 calendar months after receiving half a billion dollars loan grant from the US energy department & an additional $25.1 million revenue enhancement break from Californias Alternative Energy Advance Transportation Authority (CAEATA), Solyndras woes began. The loan was granted to assist...
7 Pages(1750 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Legal And Ethical Issues Of The Audit Of Industries for FREE!

Contact Us