Finance Ethics case
Source: A Sad Tale: The Demise of Arthur Andersen Case financial data from annual reports, SEC 10-K,
Bloomberg Terminal, or other source.
Assignment: As an analyst at a Policy Think Tank (choose one between – Brookings Institute, Center for
American Progress, Rand Corporation, or Heritage Foundation), you must conduct revenue and market
share analysis of Arthur Andersen and competitors for the period of 1999 through 2008. The report covers
the timeframe before and after the implementation of the Sarbanes-Oxley Act (SOX). The impetus for this
analysis report is to recommend to your manager whether the SOX Act should be continued, modified,
or repealed.
ANALYSIS REPORT MUST INCLUDE (narrative of your analysis with supporting tables, charts and graphs, as appropriate). The report must be no more than 3 pages. The Excel spreadsheet of your ratio computations, market share computations, and other work must be submitted as a separate file. There should be only two files submitted (report and Excel worksheet).
(1) Background: Provide an overview of the selected Think Tank’s mission as it relates to the SOX policy.
Provide brief historical problems with Arthur Andersen, especially the Enron scandal.
(2) Before SOX (1999-2001): For your assigned firm, conduct analysis which includes:
a. compare and contrast market share by revenue of all the five accounting firms**,
b. conduct revenue analysis (ROE, ROA, and Profit Margin) of Arthur Andersen and your
assigned firm, and
c. analyze percentages of revenues from consulting services versus audit services of Arthur
Andersen and your assigned firm.
d. Answer Q1 from the source case.
(3) After SOX implementation (2003-2005): With a focus on your assigned firm, conduct analysis related
to changes post SOX which includes:
a. compare and contrast market share by revenue of all the four accounting firms**,
b. conduct revenue analysis (ROE, ROA, and Profit Margin) of your assigned firm, and
c. analyze percentages of revenues from consulting services versus audit services of your
assigned firm.
d. Answer Q2 from the source case.
(4) After Arthur Andersen Conviction Overturn in 2005 (2006-2008): With a focus on your assigned firm,
conduct analysis which includes:
a. compare and contrast market share by revenue of all the four accounting firms**,
b. conduct revenue analysis (ROE, ROA, and Profit Margin) of your assigned firm, and
c. analyze percentages of revenues from consulting services versus audit services of your
assigned firm.
d. Answer Q3 from the source case.
** market share includes all accounting firms
(5) Evaluation. Based on your analysis above, especially the performance of your assigned firm is
the SOX Act still needed? Recommend whether the policy should be maintained, updated, or
repealed. You may include any current information about accounting issues and scandals to inform
your recommendation.
Report Format. Submit one Microsoft Word file or Adobe (*.pdf) file with all tables, graphs, figures
embedded:
❖ Title page with your name and selected Think Tank.
❖ All the sections must be properly labelled using the sections listed above.
FIN 620 Demise of Arthur Andersen Ethics Case – ver3
updated
❖ All required sections must be included.
❖ The report must be written for the target audience and be free of typographical and grammatical
errors. ❖ Include page numbers.
❖ Consistent font size and type. At least 12 font for text and 11 font for graphs and charts.
❖ Title page and references are not included in the page count.
❖ Include references, as appropriate.
❖ Submit report via Canvas before 11:50pm on the due date.
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