The decisions of Arthur Andersen’s audit partners on the Enron audit engagement

 

 

Prepare a report with a minimum of 1,000 words for the following case study.

After reviewing the case study, consider the following questions in your report.

What do you think was the motivation behind the decisions of Arthur Andersen’s audit partners on the Enron audit engagement?
What actions would you have taken if you were an Arthur Andersen audit partner in the Enron audit engagement?
Discuss whether auditors should make decisions based on the public interest or the client’s interest.
The facts of the case study should be included in the report.

 

Sample Solution

The scandal in December 2001, when Enron filed for bankruptcy, and the events leading up to and involving it have made Arthur Andersen and Enron two names that will live in infamy forever. These two well-known global giants in the utilities and accountancy industries cheated not only investors but also the government and the general public in order for those responsible to illegitimately expand their own fortune. How is it possible that the fallout from the management’s decisions in these two companies will benefit the accounting sector as a whole? The aftermath of Enron’s collapse and the SEC probe that followed led to a number of changes in the sector that resulted in higher standards.

ver, with the increase in media attention on the infestation, the increase in shortage has, according to the law of supply and demand, cause prices to shoot up at a high rate, inevitably, lower-income families are unable to purchase them for their personal well-being, leading to significant welfare loss as the provision of such necessary products become limited and in high demand. Perhaps, such supply is low in regions or provinces with low income due to the Friedman Theory which states people will make decisions on consumption based on their income over time; thus, suppliers choose not to supply products at required areas, leading to biases and prejudices in where such products are supplied – all without taking into a rational account of how human behaviour may respond in such conditions. The predictable nature of human beings perhaps could allow artificial intelligence to estimate individualized demand and supply using the economic concept of game theory where it understands the current social environmental circumstances that inevitably cause individuals to decide, influencing a society’s microeconomic facets. On the contrary, it is also important to note that, very similar to those who are made aware of their biases, artificial intelligence could be fed statistical biases – which may skew the solution required to accurately target the output. Thus, AI could also have the ability to discriminate; for example, upon identifying that rural areas may have lower literacy rates, it may intensify the Lewis Turning Point situation where there is a surplus rural labour in the primary and secondary sector – hence an increasing in employment saturation of such jobs when there are other applicable job vacancies available or an economy without balanced growth policies. Despite this, when assessing the potential setbacks to using Artificial Intelligence as a data-analysis program to output an individual’s or firm’s interests, economists could perhaps considerable to say that the potential for biased data is, for now, negligible relative to describing our world using models.

This question has been answered.

Get Answer
WeCreativez WhatsApp Support
Our customer support team is here to answer your questions. Ask us anything!
👋 Hi, Welcome to Compliant Papers.