Based on research done in 2002. ... Afterward, the report outlines all government actions since the Enron/Arthur Anderson scandal. ...
ACCOUNTING CRISIS
Earnings Restatements and Audit failures
By now most people have heard about the accounting meltdown at Enron. The accounting firm for Enron was Arthur Anderson, one of the Big Five accounting firms in the United States. However, the accounting meltdown at Enron is only one of many, from Waste Management to Cendant (Bradley, Byrnes, Lavelle, McNamee, & Palmeri, 2002). ... was the chairman of the Securities and Exchange Commission until October, 2001, just eight months prior to the Enron scandal. ... It wasn’t until Enron that the proposals Arthur Levitt had been fighting for, finally came to pass at least to some degree. ... If the SEC’s recommendations had been adopted, half of Enron’s six-member audit committee would have been barred from service. The reason is that the six members had significant business relationships with Enron and would not have been considered entirely independent of the company (Bradley, 2002). ... It has been considering rules on special-purpose entities (the partnerships that were at the heart of the Enron troubles), for more than 20 years (Bradley, 2002). ...
Government Actions Since Enron
January
Harvey Pitt, chairman of the SEC, appointed by President Bush, announced a plan on Jan. ...
June
By June the post-Enron legislative reforms were stalled because of Presidential indifference, Republican hostility, business lobbying, and disorganization among Democrats (Borrus et al. ... Fighting against him was Texas GOP Senator Phil Gramm, whose wife, Wendy, sits on Enron’s board (Borrus et al. ... Then he went into what went wrong at Enron, WorldCom, etc. ... Anderson (one of the Big Five), has taken the fall for the profession because of what happened at Enron. ... ” He discussed the case of Enron in his article and says that, in addition to Enron, Arthur Anderson was also the accounting firm for Waste Management and Sunbeam, both of which had audits that had to be redone (Barker, 2002).
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