Andersen. No Fairy Tale Ending

The Arthur Andersen auditing firm was founded in 1913 by an accounting professor of the same name. After Mr. Andersen’s death in 1947, the firm found itself on the verge of collapse. But in the end it was saved thanks to the efforts of Leonard Spacek, who convinced partners to remain together despite looming uncertainty. Spacek, who was Andersen’s chief executive from 1947 to 1963, had the reputation of being the “conscience” of the auditing profession (Norris 2002a). He was among the first to warn that the auditing profession’s very existence could be put in danger if it did not show sufficient independence from clients. He also complained whenever the US Accounting Principles Board yielded too quickly to pressure from companies which thought that auditing rules would significantly reduce profits. Spacek always insisted that Andersen provide above all high-quality accounting, in accordance with its corporate motto, “Think straight. Talk straight”.