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(a) A perceived lack of integrity caused irreparable damage to both
Andersen and Enron. How can you apply the principles learned in this
case personally?
(b) Generate an example of how involvement in unethical or illegal
activities, or even the appearance of such involvement, might affect your
career.
(c) What are the possible consequences when others question your
integrity? What can you do to preserve your reputation throughout your
career?
7) Enron and Andersen suffered severe consequences because of their
perceived lack of integrity and damaged reputations. In fact, some
people believe the fall of Enron occurred because of a form of “run on
the bank.” Some argue that Andersen experienced a similar “run on the
bank” as many top clients quickly dropped the firm in the wake of
Enron’s collapse. Is the “run on the bank” analogy valid for both firms?
Why or why not?
8. Why do audit partners struggle with making tough accounting
decisions that may be contrary to their client’s position on an issue?
What changes should the profession make to eliminate these obstacles?
9. What has been done, and what more do you believe should be done to
restore the public trust in the auditing profession and in the nation’s
financial reporting system?
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ACC 546 Case 5.1 Simply Steam Co.
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