Arthur Andersen's conviction on obstruction of justice charges related to the Enron debacle spelled the abrupt end of the 88-year-old accounting firm. Until recently, the venerable firm had been regarded as the accounting profession's conscience. But now, Barbara Ley Toffler, former Andersen partner-in-charge of Andersen's Ethics & Responsible Business Practices consulting services, reveals in a new book that the symptoms of Andersen's fatal disease were evident long before Enron.
In Final Accounting: Ambition, Greed, and the Fall of Arthur Andersen, Barbara Ley Toffler tells how a culture of arrogance and greed led to the downfall of the 88-year-old accounting firm. Ms.Toffler tells her tale from an insider's perspective. She was the founder and partner-in-charge of Andersen's Ethics and Responsible Business Practices Consulting Service from 1995 to 1999.
Ms. Toffler offers insights into what went wrong at Andersen. She tells how employees became "Androids," and how "everyone followed the rules and the leader." She writes that there was considerably pressure for consultants to sell as many services as possibly and to "bill our brains out." She was even encouraged to overcharge clients.
Ms. Toffler admits that she went along with the firm's demands because she liked the money. But eventually she began to believe the company was spinning out of control. In 1998, one year before she resigned, Ms. Toffler helped form a risk-management committee, which issued a memo advising employees to perform tougher audits.
Ms. Toffler, who served on the faculty of the Harvard Business School, is a faculty member of the Columbia University Graduate School of Business. Final Accounting was co-written with Jennifer Reingold and is published by Broadway Books/Random House.
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