(Solved): Question 1 Enron was an American energy company based in Houston, Texas. Enron scandal which was rev ...

Question 1 Enron was an American energy company based in Houston, Texas. Enron scandal which was revealed in 2001 has resulted in the dissolution of the Arthur Andersen. Arthur Andersen was one of the Big 5 audit firm at that time. Enron was seen as the biggest audit failure. World.com was an American telecommunications company. It was the second largest long-distance phone company in the US. In 2002 WorldCom submitted the largest bankruptcy filing in the US history. The WorldCom scandal cost 30000 employees their jobs and cost investors

billion. Arthur Andersen was WorldCom's auditor during the five financial quarters in question. Required: A. Research the accounting fraud committed by Enron and WorldCom. Describe the nature of the fraudulent activities that led to the collapse of these two companies. B. Arthur Andersen, a once highly respected auditing firm, suffered irreparable damage due to a perceived lack of integrity. Reflect on how the integrity lessons learned from this case can be applied to your personal and professional life. C. Research the changes in laws and regulations after the WorldCom and Enron scandals, with a particular focus on the Sarbanes-Oxley Act of 2002. How did the Sarbanes-Oxley Act change audit practices, corporate governance, and financial reporting requirements?