Abstract

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.

doi.org/10.1111/j.1911-3846.2011.01068.x, hdl.handle.net/1765/31991
ERIM Top-Core Articles
Contemporary Accounting Research
Rotterdam School of Management (RSM), Erasmus University

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