英语论文网

The figure highlights some cost associated with Arthur Andersen incurred through corporate scandals in which they had some degree of blame. The estimated cost of these four corporate scandals was $412.3 million Wall Street Journal, 2002. These figures do not show the figures including Enron but these other corporate scandals were deemed to be smaller and the cost of corporate scandals is here.

The Sarbanes Oxley Act (SOX) (2002) was introduced in direct response to a number of corporate scandals, namely Andersen/Enron (Economist, 2005). This response was similar to the UK's response to Maxwell and Polly Peck, The Cadbury Report (1992) however the Sarbanes Oxley was legislation which meant companies had to follow the Corporate Governance Guidance set out in SOX (2002).

Comparison

These two companies experienced different types of corporate scandals. The two comparisons chosen are quite different but this highlights the fact that corporate scandals can happen to any business.

There was a degree of dishonesty in both the Andersen and Maxwell scandals, with Robert Maxwell being dishonest and employees and directors being dishonest for Andersen. This dishonesty was at the source of both scandals with Maxwell lying about how many assets he had and Andersen shredding documents which would have incriminated them.

There was also conflict of interests in both cases. Robert Maxwell was the chief executive and the chairman (Maier, 2005) and in Andersen they were consultants to Enron before being their auditors (Goldstein, 2002). This meant that in the case of Maxwell he had too much power and in the case of Andersen they had worked for Enron in a different capacity which means that they were no independent, they knew about the inside affairs of the company.

These scandals occurred when there were no proper corporate governance legislation / guidance. The first piece of Corporate guidance was not introduced in the UK until 2001, which was the Cadbury Report (Cadbury Report, 2002) and the first piece of Corporate Governance legislation was not introduced to the USA until 2002, The Sarbanes-Oxley Act (2002) (Sarbanes Oxley Act, 2002). This meant that these two companies had no guidance/legislation on Corporate Governance, which meant they could choose how their companies were run.

One of the key failures in both corporate scandals was internal control. Andersen was also involved in a number of corporate scandals and nothing was done within the company to stop these from occurring. Both of the above corporate scandals had a positive impact on corporate governance with Andersen leading to the Sarbanes-Oxley Act and Maxwell largely contributing to the Cadbury report.

Conclusion

Corporate scandals have had devastating affects on companies, in Andersen's case the massive fines and loss of business activity. However corporate scandals have benefited corporate governance as the Cadbury guidance was implemented in response to corporate scandals such as Polly Peck and Maxwell (Cadbury, 2002). In the United States the Enron scandal led to the 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。