A perceived lack of integrity caused irreparable damage to both Andersen and Enron.

How can you apply the principles learned in this case personally? Generate an example of how involvement in unethical or illegal activities, or even the appearance of such involvement, might adversely affect your career. What are the possible consequences when others question your integrity? What can you do to preserve your reputation throughout your career? As students begin a career in auditing they need to be aware that they will make many professional judgments and should make these judgments considering the interests of all parties involved not just themselves or management. If a professional is involved in a decision the ethical appropriateness of which is later called into question by shareholders or regulatory authorities, for example, he or she will run the risk of losing his or her job, and possibly even the ability to obtain work with other firms due to a damaged reputation or loss of professional license. Even if a particular action does not technically break any laws, if others have any reason to question a professionals integrity there will be a loss of trust that will negatively affect the demand for this persons services. An auditor can preserve her or his reputation by ensuring that she or he follows her or his conscience and exercises a high level of ethics and professionalism. She or he can also rely on firm resources and personnel, for example by obtaining an objective second opinion, to ensure that personal judgments are accurate and unbiased. The old parable of a young man and a rattlesnake figuratively illustrates how getting involved in questionable circumstances, whether in fact or in appearance, might adversely affect a persons career. The young man in the story was climbing in the mountains one day when he saw a rattlesnake that was dying because it was unable to descend the steep cliffs of the mountain on its own and because the weather was too cold at that altitude. The rattlesnake begged the young man to carry him down the mountain and promised that he would not bite the young man. The boy finally consented and carried the rattlesnake down the mountain. When the boy reached the base of the mountain, he stooped down to lay the rattlesnake on the ground. Suddenly, the rattlesnake bit the young man. The boy cried out in horror and cursed the rattlesnake for failing to abide by its promise not to bite him. The rattlesnake responded, You knew what I was when you picked me up. Getting involved in unethical or illegal activities, or even the appearance of such, is like picking up a rattlesnake that in the end will bite its carrier. To act in a manner that violates trust or creates the appearance of impropriety can be similarly lethal to ones reputation and credibility. In the business world, trust is difficult to restore once there has been a breach of that trust. It can take months or years to restore . . . or it may be permanently lost. The following points can be used as a guideline since this question can be answered in a variety way; Any professional judgment should consider the interest of all parties involved not just the auditor themselves or management. If a professional is involved in a decision the ethical appropriateness of which is later called into question by shareholders or regulatory authorities, he or she will run the risk of losing his or her job, and possibly even the ability to obtain work with other firms due to a damaged reputation or loss of professional license. Even if a particular action does not technically break any laws, if others have any reason to question a professionals integrity there will be a loss of trust that

will negatively affect the demand for this persons services. This issue can be solve by ensuring that a high level of ethics and professionalism been exercised. In order to ensure that those personal judgments are accurate and unbiased, obtaining an objective second opinion from fellow employees will be useful. To act in a manner that violates trust or creates the appearance of impropriety can be similarly lethal to ones reputation and credibility. In the business world, trust is difficult to restore once there has been a breach of that trust. It can take months or years to restore . . . or it may be permanently lost. Why do audit partners struggle with making tough accounting decisions that may be contrary to their clients position on the issue? What changes should the profession make to eliminate these obstacles? As we know public accounting is a highly competitive, service-oriented business. Public accounting firms have a vital interest in pleasing their clients by providing value and excellent customer service. In order to provide excellent client service, partners may sometimes feel pressure to avoid taking tough stands on a clients accounting choices. Or they may run the risk of losing clients to other accounting firms. On the other hand, public accounting firms are in the market to generate profit. As owners of a public accounting firm, partners are indeed interested in the financial performance of the firm because, among other reasons, partner income and bonuses depend on annual revenues. Partners are often responsible for revenue targets each year and they attempt to reach these targets. One interesting note is that audit fee revenues from such companies as Enron are very lucrative Andersens audit fee at Enron was about $48 million per year. Finally, some argue that other services to auditing clients may hold the auditors to be objective and take tough stands on questionable accounting practices., it is interesting to note that in 2000 Andersen generate more from Enron in consulting fees than in auditing fees, with consulting fees topping $50 million in that year alone. Finally, The Sarbanes-Oxley Act of 2002 now makes it illegal for external auditors to perform internal auditing and a variety of management consulting services for the same company. which makes it