Management Planning of Arthur Anderson

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In this paper, the writer will evaluate the planning function of management within Arthur Andersen. Specifically, the paper will discuss at least one legal, ethical, and social responsibility issue that impacts Arthur Andersen. Additionally, this paper will analyze the impact these factors have on Arthur Andersen’s management planning. Finally, this paper will analyze at least three factors that influence Arthur Andersen’s strategic, tactical, operational, and contingency planning.

The firm of Arthur Andersen LLP was founded in 1913 by Arthur Andersen and Clarence DeLany and named Andersen, DeLany & Co. The firm later changed its name to Arthur Andersen & Co. in 1918. Arthur Andersen LLP, based in Chicago, Illinois, was one of the “Big Five” accounting firms who perform auditing, tax, and consulting services for large corporations, such as Enron. In 2002, pending the outcome of the Department of Justice prosecution for obstruction of justice, the firm agreed and voluntarily surrendered its licenses and rights to practice auditing and other financial services in the United States. These charges stemmed from the firms handling of the auditing of Enron, an energy corporation, which resulted in the loss of over 85,000 jobs, devaluation of Enron’s stock from over $90 per share to pennies, and the bankruptcy of Enron. When Arthur Andersen was indicted, the firm lost almost all of its clients and faced over 100 civil suits related to its audits of Enron and other companies, such as Sunbeam and WorldCom. Additionally, Arthur Andersen’s reputation was so badly tarnished that no company wanted its name on their audit. In a 2005 Supreme Court ruling, the conviction against Arthur Andersen was unanimously reversed for serious ...

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...ess. Enron and Arthur Anderson are prime examples of poor planning due to total disregard for the legal, ethical, and social issues that its executives are expected to follow.

In conclusion, this paper evaluated the planning function of management within Arthur Andersen. Specifically, the paper discussed one legal, ethical, and social responsibility issue that impacted Arthur Andersen. Additionally, the paper analyzed the impact these factors have on Arthur Andersen’s management planning. Finally, the paper analyzed three factors that influenced Arthur Andersen’s strategic, tactical, operational, and contingency planning.

References

Arthur Andersen (2008). Retrieved March 3, 2008, from http://en.wikipedia.org/wiki/ Arthur Andersen

Robbins, S.P. (2005). Organizational Behavior (11th Ed). Upper Saddle River,

New Jersey: Pearson Prentice-Hall.

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