ABSTRACT
The Enron scandal was at its heart an accounting scandal, and Enron’s auditor, Arthur Andersen LLP, was soon drawn into the maelstrom. The accounting firm had given unqualified opinions on all of Enron’s annual financial reports. Andersen insisted on hiring only college graduates to serve as accountants in his firm, a requirement not universal at the time. Andersen placed much emphasis on the internal training of accountants. By the end of the century, Arthur Andersen had over 300 offices located in eighty-four countries. The collapse of the Four Seasons Nursing Centers of America Inc. in 1970 resulted in claims that Arthur Andersen, its auditor, failed to disclose that the company’s financial statements were not accurate. Arthur Andersen was involved in a giant fraud in the 1990s involving Procedo, a German factoring firm, and Balsam, a manufacturer of sports playing surfaces.
