Which case is described as the greatest corporate fraud case in American history that led to the closure of Arthur Andersen?

• A. Enron Scandal
• B. WorldCom Scandal
• C. Tyco International Scandal
• D. Lehman Brothers Collapse

Answer: (A)

Enron scandal is the case in which a massive deception of financial results was carried out through off-balance-sheet entities and aggressive accounting practices that hid debt and infl ated profits. The auditing firm Arthur Andersen signed off on those fraudulent statements and was later found to have unlawfully shredded documents related to the Enron investigation. That misconduct led to the loss of Andersen’s license to audit public companies and its ultimate collapse. Because of the scale of the fraud and the direct link to the demise of the auditing firm, this case is remembered as one of the most consequential corporate fraud events in American history and the one that brought down Arthur Andersen. WorldCom, Tyco, and Lehman were major crises too, but they did not cause the same outcome for the auditing firm.