Case Study Of Arthur Andersen's Company

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Before founding Andersen, Delany & Co in Chicago, in 1913, Clarence Delaney and Arthur Andersen worked together in Price Waterhouse. In 1918 Delany left and the firm changed its name to Arthur Andersen. In the 1930s the federal government enacted new laws requiring public companies to submit their financial statements to an independent auditor every year. The firm experienced rapid growth due this new law. During the following decades of practice the accounting firm grew to become one of the “Big Five.” This prestigious tittle voiced the fact that Arthur Andersen had become one of the largest accounting firms in the United States. The name Arthur Andersen was globally respected. The firm stood representative of confidence, integrity, and ethics in accounting. This stellar reputation was vital to its success. (Squires, 2003) In the 1950s Andersen launched a consulting business that nearly immediately experienced colossal and explosive growth as global demand for information technology increased. Within 20 years a significant portion of Andersen’s worldwide fees came from its consulting business. In fact, by 1979 Andersen had become the world’s largest business services firm. Consulting revenue eclipsed audit revenue for the first time in 1984 and continued to grow at a rapid pace. This explosive growth was accompanied by a shift in Andersen’s strategic vision. Now, the firm’s highest priorities became client retention and persistent revenue growth. These new priorities were

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