Did the waste management audit failures signal lower firm-wide audit quality at Arthur Andersen?
Contemporary Accounting Research , Volume 28 - Issue 3 p. 859- 891
We examine Arthur Andersen’s audit quality in the 10 years before the collapse of Enron. During this period, Andersen was involved in a series of deficient audits, including Colonial Realty, Sunbeam, Waste Management, and the Baptist Foundation of Arizona. Andersen paid $512 million to settle lawsuits related to these audits, and each of the settlements were among the largest ever made by an audit firm in the pre-Enron period (Hawkins and Cohen 2003).1 As Ball (2009) suggests, Andersen’s reputation had started to suffer even before Enron.
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Cahan, S, Zhang, W, & Veenman, D. (2011). Did the waste management audit failures signal lower firm-wide audit quality at Arthur Andersen?. Contemporary Accounting Research, 28(3), 859–891. doi:10.1111/j.1911-3846.2011.01068.x