Revisiting Andersen Consulting: Lessons Learned to Corporate Integrity and Responsibility

Abstract

This study delves into the lessons derived from Andersen's collapse and resurgence, exploring the factors contributing to its revival and the implications for corporate integrity and responsibility. The study employs a comprehensive conceptual framework, integrating insights from various fraud studies. This framework considers individual traits, governance and control, economic environment, and regulatory factors as determinants of fraudulent practices. Additionally, it explores the role of narratives and rationalizations in shaping regulatory responses to scandals, providing a novel perspective on sense-making processes in the wake of corporate crises.

The research revisits Andersen Consulting, focusing on rebuilding corporate integrity and responsibility. It examines critical elements such as trust, integrity, and ethics, essential for auditing firms to maintain public confidence in financial reporting.

This study revisits the Andersen Consulting case, concentrating on the Enron scandal. It adopts a case study approach, emphasizing in-depth analysis through interviews, archives, and observations. While the study provides valuable insights, it acknowledges limitations inherent to a single-case study design.

The research findings emphasize the pivotal role of ethical leadership, effective corporate governance, transparency, and regulatory oversight. Trust-building mechanisms within boards, CEOs, and directors are essential, prioritizing integrity and ethical conduct. The study highlights the need for environmental awareness, fair employment practices, risk management, and ethical business decisions within corporate governance frameworks. Lessons from the Enron scandal underscore the importance of ethical conduct, transparency, and robust governance structures. The study recommends prioritizing integrity in recruitment, fostering ethical cultures, and comprehensively addressing risk factors. Regulatory bodies should ensure ongoing monitoring and adapt regulations to evolving business practices, promoting a resilient and responsible business environment. This study offers a holistic perspective on the Andersen Consulting case, providing valuable insights for auditors, corporate leaders, regulators, and researchers in understanding the complexities of corporate integrity and responsibility in the modern business landscape.