The Business Case for Sustainability

In this chapter, I discuss how companies address sustainability challenges. First, the chapter begins with examples of different corporate approaches to taking responsibility for sustainability. Second, I explore how companies are viewed from the stakeholder perspective, so how others outside the company view the managers’ motivations for engaging in corporate responsibility. Although most companies are still motivated by risk reduction and/or marketing in their sustainability work, this chapter will reframe the motivations into something more positive—a business opportunity. Four cases will be presented, Nike, Arthur Andersen, Volkswagen, and companies involved in the Rana Plaza tragedy, and the companies’ approaches relative to the following strategies will be discussed: reacting, defending, accommodating, and, finally, a proactive approach in which a business’s profitability is anchored in sustainability. The chapter will conclude with reflections on business models for sustainability.

Beburughen Becce’ dalam Saloka Madura Sebagai Nasehat bagi Auditor

Every ethnicity and culture is unique and contains good ethics for society. Various advice and advice from parents, teachers, and tribal leaders can be conveyed in unique ways such as through the typical proverb of the culture itself. This paper explores how beburghen becce' (good advice) contained in saloka Madura can be advice for auditors in carrying out the audit process so that accounting scandals such as Arthur Andersen and Enron do not recur. The research method used is the study of literature obtained from various sources. This paper explains that beburughen becce' (good advice) contained in saloka Madura such as pakoh ngenneng ka kaju (nails stuck to wood), lakona lakone kennengnganna kennengnge (employees work on the place they live in), mon kerras paakerres (if it is hard it must be crispy), oreng jhujhur mate ngonjhur (honest people die long), and sweet jhe' dhuli kalodhu' pae' jhe' dhuli paloa (sweet, don't swallow bitter, don't immediately spit it out) can provide advice for auditors to carry out audits with independence, responsibility, objectivity, integrity, and skeptical.

The Spillover Effect of Audit Firm Office Acquisition on the Audit Quality of the Existing Client Base

This study investigates accounting firm office acquisitions. It explores whether office acquisitions affect post-acquisition office audit quality, particularly whether there is a spillover effect on the existing client base of the acquiring office. We capitalize on a unique circumstance: the 2002 acquisition of Arthur Andersen (Andersen) offices by other audit firms. This setting involves a set of offices in each of the remaining large international audit firms that acquired entire Andersen local practices and a set of offices that did not acquire Andersen practices. Using a within-audit firm matched sample and a difference-in-differences research design, we find robust evidence of higher audit quality post-acquisition among the audits of existing clients of the acquiring offices. These findings extend the literature on office audit quality and provide initial evidence of the impact of audit firm office acquisitions on the existing client base.

Complementarity between Audited Financial Reporting and Voluntary Disclosure: The Case of Former Andersen Clients

Prior literature presents various perspectives on the role of financial reporting. One view is that mandatory periodic reporting disciplines managers and encourages timely voluntary disclosure. We examine this "confirmation hypothesis" using the shock to financial-reporting quality experienced by Arthur Andersen clients forced to switch auditors. Consistent with the confirmation hypothesis, we find that former Andersen clients increase disclosure after they change auditors. They increase forecasting frequency and enhance forecasting precision and specificity. We present additional cross-sectional evidence that shows Arthur Andersen clients with larger increases in financial-reporting quality increased their disclosure by relatively more, even within the sample of Arthur Andersen clients. We supplement our main findings with a battery of tests to reduce the possibility that alternative shocks and uncertainty drive our results. Our findings support complementarity between financial-reporting quality and voluntary disclosures.

Negative accounting stereotype: Enron cartoons

A sample of editorial cartoons published following the wave of accounting scandals in the United States culminating in the collapse of Enron and the demise of the auditors Arthur Andersen LLP was examined to explore the portrayal of accounting, accountants and auditors. The nature and importance of the cartoons was also investigated. While the examination revealed what cartoonists had to say about accounting, accountants and auditing, the purpose was to ascertain the stereotypes conveyed. The cartoonists working from established preconceptions of accounting and accountants redefined and reshaped accounting stereotypes. They replaced the dull but honest image with a negative one, the fraudulent accountant. However, the image of the male accountant survived. As social critics, the cartoonists focused on the consequences on employees and stockholders but neglected to address the consequences for business institutions.

Obituary Richard Victor Alvarus Mattessich

Was born in 1922 in Trieste, Italy, and died on September 30, 2019 in Vancouver, Canada. He grew up in Vienna, graduating with a Dr. rer.pol. in 1945, Degree of Doctor of Economic Sciences, Hochschule fur Welthandel, nowadays Wirtschaftsuniversitat Wien, Economic University of Vienna. He had the following academic positions: fellow of the Austrian Institute of Economic Research, Vienna (1945-47); lecturer at the Rosenberg College (St. Gallen, 1947-52); then he emigrated to Canadà, where he became professor of commerce and economics and Department Head of Commerce at Mt. Allison University (Sackville, N.B. 1953-59), after working for a year in an insurance company, Actuarial and Auditing Department, in Montreal; from 1959 to 1967 he served as a tenured associate professor, University of California, Berkeley, School of Business Administration , following one year in a visiting position; in 1966-67 he simultaneously held a chair in economics at the Ruhr Universitat, Bochum, Germany; the final position was at University of British Columbia, Arthur Andersen chair (Vancouver, 1967-87; since 1987 Prof. Emeritus); professor, Technische Universitat (Vienna, 1976-78—simultaneously with his position at UBC); he held also various visiting professorships at universities in Austria, Germany, Italy, Japan, New Zealand, Spain and Switzerland.

The effect of SOX on audit quality

Purpose This paper aims to investigate two issues. First, the authors test the effect of the Sarbanes–Oxley Act (SOX) on audit quality after 10 years. Second, the authors test whether it was necessary to close all of the Arthur Andersen offices due to the misbehavior of a few (e.g. the Houston and Atlanta offices). Design/methodology/approach The authors have used conservatism (Basu) as a proxy for audit quality. Findings The authors find that, over the long run (10 years) after SOX adoption, there is a significant positive change in conservatism as compared to during the previous similar period. In addition, the authors find that only 6 of the 20 city-level offices of Arthur Andersen were less conservative than were their other Big 6 competitors in the same city. Furthermore, the results also suggest that some city-level offices of Arthur Andersen were engaged in more conservative accounting practices than were their competitors and the Houston Andersen offices. Originality/value This study documents, using empirical evidence, that the implementation of SOX is successful, and that one factor that helped lead to this success might be the harsh punishment on Arthur Andersen.

Examining Academic Dishonesty

Academic dishonesty (AD) has plagued many higher education institutions (HEIs). This chapter examines AD among accounting students in business schools and discusses possible mechanisms to reduce misconduct among students, as well as staff. Today's students are tomorrow's accounting professionals. Yet, some HE students strive to succeed at all costs by using unethical means including being aided by dishonest academic staff. For example, the unethical and corrupt practices in Enron, and the subsequent closure of one of the leading international accounting firms, Arthur Andersen, raised questions pertaining to codes of conduct, ethics, and morality being taught in business schools. This chapter reviews the literature, identifies issues from an internet search of actual cases, and then offers recommendations for reducing such detrimental behaviors.

Long-Run Career Consequences for Andersen's Putative Partners

ABSTRACT The sudden collapse of Arthur Andersen & Co. (Andersen) in 2001–2002 altered the careers of many professionals who were employed by that international accounting firm. Now that many years have passed since that event, some long-run consequences can be quantified. This paper examines the subsequent careers of 267 managers employed by Andersen at that time in seven Midwestern U.S. cities. Benchmarking these results against similarly situated individuals at another large firm, we conclude that ex-Andersen managers were much less likely to continue in large firm employment, stay in public accounting, or achieve partnership status in the profession. However, the professional networks maintained by ex-Andersen people many years after that firm's collapse appear as strong as that of the control sample. Data Availability: Data are available from the first author upon request.