Andersen Consulting Research Articles

Did the Waste Management Audit Failures Signal Lower Firm-Wide Audit Quality at Arthur Andersen? *

This study investigates Arthur Andersen’s audit quality in the decade before the collapse of Enron. Andersen’s involvement in the Waste Management audit failures — which relate to audits of the company’s 1992- 1996 financial statements — led the SEC to accuse Andersen of issuing false and misleading audit reports and resulted in a permanent injunction that prohibited Andersen from further violation of securities laws. We examine whether the Waste Management audit failures were symptomatic of widespread audit deficiencies at Andersen. Using three empirical measures of audit quality — discretionary accruals, clients’ propensity to meet or just beat analyst forecasts, and accounting misconduct identified by Accounting and Auditing Enforcement Releases (AAERs) — we find no overall evidence suggesting lower average audit quality at Andersen relative to the Big 4 during the period 1992-2001 for a sample of S&P 1500 firms. Focusing on high litigation risk firms, however, we find larger absolute and income-increasing accruals and a greater propensity to meet or just beat analyst forecasts for Andersen clients relative to the Big 4 clients in the period August 7, 2000 to December 31, 2001, after Andersen’s divorce from Andersen Consulting. These findings provide some evidence that, after the divorce, Andersen was not able to constrain aggressive accounting where it may have mattered most, that is, among its clients with the highest litigation risk.

Successful Corporate Telecommuting with Technology Considerations for Late Adopters

THE SUCCESS OF CORPORATETELECOMMUTINGNurturing the knowledge-based workforce is of highstrategicimportance.Boostingproductivityandattract-ingthebestemployeesaresignificantrolesincreatingacompany’s competitive advantage. As computing andtelecommunicationscontinuetoadvance,the abilitytowork anywhere at anytime, while maintaining sched-uled communications with managers, has createdopportunities for organizations to use telecommutingsolutions to produce superior results. These systemsthat enable employees to perform regular, officiallyassigned duties at home, or at alternative work sitesgeographically convenient to their residences, arereferred to as telecommuting. Through improvementsin telephone lines, cell phones, Internet, broadband athome, WiFi, virtual private networks, e-mail, andinstant messaging, telecommuting facilitates a flexibleworkplace in which employees have options about thestructure of their work time.Telecommuting – and the very closely relatedideas of telework and virtual office – providesemployeeswithlatitudeinchoosingwhenandwherethey work. For example, employees may haveflexibility in start/end hours and may be allowedcompressed work weeks, e.g., working 10 hourson four days of a week instead of eight hours on fivedays. While meeting their managers’ performanceexpectations, employees who telecommute are ableto set or modify their arrival and departure to sche-dule carpooling, vanpool, or busing, and to accom-modate eldercare, childcare and other personalresponsibilities.Telecommuting options include (a) mobile tele-commuting or agile working, when the worker doesnot work from a fixed location; (b) home-based tele-commuting,whentheemployeeworksfromhome;(c)telecommuting centers, when employees work atsatellite facilities that may or may not be populatedwith a specific set of employees; and (d) functionalrelocation, when an entire business function is per-formed at a physically remote location that has accessto the company’s main computer and communicationsystems.Companies often develop unique telecommutingsolutions that incorporate a combination of theoptions. Electronics retailer Best Buy Inc.’s‘‘results-only work environment’’ (ROWE) is focusedon improving work efficiency by leveraging theadvantages of multi-geographic teams within theorganization. Employees design their own flexibleschedules and work anywhere they prefer as longas the tasks are done as expected and on time. To aidin the restructuring of employee responsibilities,Best Buy’s telecommuting program establishes aflexible workplace, eliminates mandatory meetings,and bases productivity strictly on output rather thanhours. As author Michelle Conlin reports, the ROWEinitiative has resulted in a reduction in voluntaryturnover and an increase in employee productivity of35 percent.TELECOMMUTING WORKPLACEThe competitive global environment is forcing leadingcompanies to look beyond new product innovation toinclude the search for competitive advantages thatderive from improvements in workplace structure.In response, many major companies are expandingtheir telecommuting commitments, including Ander-sen Consulting, AT&T Corp., Best Buy, Booz-Allen &Hamilton Inc., Cisco Systems Inc., Delta Air Lines, FordMotor Company, Georgia Power, Hewlett-Packard Co.,IBM Corp., Lotus, Northern Telecom Ltd., Northrop &Grumman Corp., Sun Microsystems Inc., and USWestInc.Other companies, large and small, are testingunique combinations of telecommuting options thatallow workers more flexibility. Most have resulted inreports of substantial benefits to the employees andthe company. Options available to companies includeflexible working hours, workspace alternatives, job

The Fifth Column: Working for Free So You Can Work for Money So You Can Work for Free Again

A Common Question Over the years, I have had numerous people ask me how I ever got started as a consultant. They are espe cially curious because I do not appear to be a member of the button-down brigade and I certainly don't fit the profile of Andersen Consulting or Deloitte & Touche. Since my attainment of near perfection in pomposity, it makes no sense that I would ever be brought in as a consultant. So what is going on? Sit back and relax. Because I only do pro bono now, I'm no threat to anyone. All will be finally revealed by the man behind the curtain. First, I clearly understand that I am never called in early on a problem. I'm not the starting pitcher. I'm the closer. In short, I am not called in to heal the sick. I am only brought in to raise the dead. Bluntly, my phone rings after the engagement has been completely blown and all other legal remedies are exhausted. As I mentioned before, I have been paid very well to be brought in a closed car at O dark thirty in the morning, fix the problem, leave, and agree (contractually) that I was never there. For similar reasons, some of my best pro bono for various military establishments will still be classified after I am long gone. Second, I have persisted in the quaint notion that you cannot improve anything you haven't done. And, as my friends know, I mean: IT, not watch it. I have turned down a plethora of possible consulting en gagements because I, or one of my students, would not be allowed to work the line. Most recently, I turned down the Home Security Office of a name less country. I turned it down because this country wanted me to improve the length of its queues but would not allow either me or my students to take the training, become a search and wand person, and DO the job. (Remember, I and my students on a pro bono basis for government agencies I approve of.)

Computers in medical audit — A guide for hospital consultants to personal computer based medical audit systems. West Midland Regional Health Authority in collaboration with Andersen Consulting. 162 × 237 mm. Pp. 89. Not illusrrated. 1990. Oxford: Royal Society of Medicine. £10.00 paperback

Computers in medical audit — A guide for hospital consultants to personal computer based medical audit systems. West Midland Regional Health Authority in collaboration with Andersen Consulting. 162 × 237 mm. Pp. 89. Not illusrrated. 1990. Oxford: Royal Society of Medicine. £10.00 paperback

Exploring Management Consulting Firms as Knowledge Systems

This article examines the nature and the generation, dissemination and translation of knowledge in large, global management consulting organizations. The knowledge system in consulting organizations is modelled as consisting of three interacting knowledge elements: methods and tools, providing a common language and knowledge structure; cases, carrying knowledge in a narrative form; and the experience of individual consultants that is essential for the adaptation of methods, tools and cases to the specific consulting project. A number of recent studies have characterized knowledge-management strategies as focusing on either articulate knowledge or tacit knowledge. We argue that a fruitful understanding of knowledge management in management consulting requires attention to the relations between the different elements that represent different kinds of knowledge. Based on case studies in Andersen Consulting (now Accenture) and Ernst & Young Management Consulting (now Cap Gemini Ernst & Young) these knowledge elements and the interplay between them are identified and analysed. The main role of articulate knowledge is not to replace experience, but rather to support the generation, dissemination and use of it. A number of consequences of this conceptualization of the knowledge system are discussed in terms of the ability of the knowledge system to generate different types of learning and the complementarity of structural and individual knowledge.

A 'Global' Arbitration Decided on the Basis of the UNIDROIT Principles: In re Andersen Consulting Business Unit Member Firms v. Arthur Andersen Business Unit Member Firms and Andersen Worldwide Societe Cooperative

THE NUMBER of decisions rendered in international commercial disputes in which the UNIDROIT Principles of International Commercial Contracts are applied in one way or another continues to grow.1 Most of them are arbitral awards,2 but there are also decisions handed down by domestic courts. The ways in which the UNIDROIT Principles are used range from references to individual provisions for the purpose of interpreting correctly ( i.e . in conformity with internationally recognized standards) a particular domestic law or international uniform law instrument otherwise applicable,3 to the application of the UNIDROIT Principles in their entirety as the law governing the substance of the dispute. The latter is the case above all when the parties themselves have chosen the UNIDROIT Principles as the law governing their contract; yet the UNIDROIT Principles are increasingly being applied as the law governing the substance of the dispute by arbitrators on their own motion, both when the parties have remained silent as to the applicable law and when they have referred to ‘general principles of law’, ‘rules and usages of international trade’, the ‘ lex mercatoria ’ or the like.4 A recent example of an arbitral award based on the UNIDROIT Principles is the ICC award rendered a few months ago in Andersen Consulting Business Unit Member Firms v. Arthur Andersen Business Unit Member Firms and Andersen Worldwide Societe Cooperative .5 The award in question, which was immediately publicized worldwide,6 brings to an end a dispute which not only involved enormous economic interests7 but was truly ‘global’ in its dimensions: suffice it to say that the claimants were the 44 Andersen Consulting Business Unit member firms operating in 37 countries, while the respondents were, in addition to the Geneva-based Andersen Worldwide Societe Cooperative, most of the 93 Arthur Andersen …

Virtual learning: A revolutionary approach to building a highly skilled workforce

Through the virtual reality of computer simulations and role-playing scenarios, Virtual Learning shows you how to radically rethink your company's entire training process. Its proven steps and strategies will demonstrate how you can excite your employees, make them want to learn more about your business, improve your customer service dramatically, and decrease training costs as you increase productivity! For well-known educator and author Roger Schank, these methods are more than just theory. Schank packs Virtual Learning with actual case histories and examples, including in-depth coverage of the Business Practices Course he developed for Andersen Consulting. After working with Schank, Arthur Andersen, the world's largest consulting firm and the first to implement virtual learning, reported that dramatic improvements resulted from their training programs and other companies have asked to purchase their training systems.

Enterprise 50: successful growing enterprises (SGEs) of Singapore: an exploratory study of success factors

The Enterprise 50 (E-50) award is a recognised hallmark of excellence accorded by the Singapore Economic Development Board in conjunction with Andersen Consulting and Business Times to successful growing enterprises (SGEs) in Singapore. The E-50 companies are deemed to play important role in the development of an external economic wing in Singapore's economic development, in line with the nation's desire to internationalise its local enterprises. The availability of a pool of E-50 companies provides opportunity to study their growth process, business practices and strategies which are often regarded to be success factors for enterprises. This paper reports on the findings from four case studies of E-50 companies. The findings reveal that they follow a discernible pattern of sequence of stages as they develop and grow, with the founder being the most important asset in the start-up stage and the survival stage. The findings also suggest that the success factors hinge on the entrepreneur's personality and experience in the start-up and survival stages, and on the success of his managerial role in the subsequent stages. Six success factors - revealed by the entrepreneurs in this study as entrepreneurial, marketing, operational, financial, competitive strategy and management - were associated with the successful performance of E-50 companies. Having a successful start, early identification of source(s) of competitive advantage and effective managerial pursuit to its sustenance has provided the road map for their success. While the assistance package of the Singapore government complements the foundersi¦ efforts to acquire the capability to compete in the international markets, the choice to be a growing business resides with the founders of these local enterprises.

Fostering the Suspension of Disbelief: The Role of Authenticity in Goal-Based Scenarios

Goal-based scenarios (GBSs) have become a mainstay of Andersen Consulting’s 900 million dollar efforts to train its employees. Utilizing a theoretical framework based upon social constructivist theory, we create classroom learning environments that use theatrical elements to simulate real-world client engagements. The suspension of disbelief, however, is one factor that can be detrimental to human learning in immersive simulations. This paper describes one of our school designs, constructs a theoretical framework to support our approach, examines some of the factors associated with the suspension of disbelief, and makes recommendations for enhancing the authenticity of goal-based scenarios.

Public‐Private Partnerships for Service Delivery

This article reports on the performance of services contracted out by the public sector to private sector organisations. The conclusions are based on probably the biggest‐ever questionnaire survey on this topic to‐date: it covered 7,500 public‐private partnerships, and was replicated annually over three years. The private sector organisations providing the services included multinationals like IBM and Andersen Consulting as well as local firms. The public sector “clients” were all from three Australian states or the Australian federal government. The study not only shows that these partnerships are set to go on expanding fast, but also explores the ways in which they have been successful and the pitfalls which the partners need to avoid.

From Knowledge Engineering to Knowledge Management

Knowledge Management is seen by many to be a prerequisite for the successful organisation, and one that relies heavily, though not exclusively, on a sound technological infrastructure. A major drawback, though, with current technology (e.g. Lotus Notes and WWW) is its focus on information management and communication rather than on knowledge itself. What Knowledge Management needs are tools and techniques that are more oriented towards knowledge - its creation, mapping, transfer and use. We show how many of the methods and tools used in the branch of artificial intelligence known as Knowledge Engineering can be adapted to provide such a knowledge-oriented technology, and lead to significant benefits for organisations. A number of case studies are presented which illustrate our points, including decision making at Andersen Consulting and best practice at Rolls-Royce. A more elaborated use is shown in the context of Business Process Reengineering, where a new software tool-kit called SPEDE is being applied and validated within the aerospace and automotive industries.

Development Scenarios for Organizational Memory Information Systems

:Well-managed organizational memories have been emphasized in the recent management literature as important sources for business success. Organizational memory information systems (OMIS) have been conceptualized as a framework for information technologies to support these organizational memories. OMIS development may include several projects and may take many years. This paper classifies and analyzes OMIS development scenarios to provide guidance and support for OMIS development. This includes the definition of the roles of participants, a work schedule, and a definition of deliverables and deadlines. The mostly evolutionary nature of OMIS development requires that the results of these steps be monitored and adjusted when needed. Furthermore, a contingency framework and eight rules have been hypothesized, partially based on ex-post analysis of three cases (Veronica Broadcasting, Andersen Consulting, and Nationale-Nederlanden General Insurances). The paper provides concepts and a framework that may be an aid to research on refining the rules for analysis and design of OMIS.

A Novel Approach for Exploitation of Deepwater Gas Fields

This article is a synopsis of paper SPE 50043, "A Novel Approach to the Exploitation of Deepwater Gas Fields - The FPLSO Difference," by K.R. Stephens, SPE, Andersen Consulting; B.F. Ronalds, SPE, U. of Western Australia; and E.J. Piermattei, Kvaerner Oil & Gas Australia, originally presented at the 1998 SPE Asia Pacific Oil and Gas Conference and Exhibition, Perth, Australia, 12-14 October.

The ?New HR? and the new HR consultant: developing human resource consultants at Andersen Consulting

This article deals with the manner in which Andersen Consulting trains its HR consultants. In the face of the new complexity of HR, where new executive buyers are demanding HR solutions with business value, new ways must be found to bring professionals to high performance levels. Consultants must be armed with a broader and deeper set of competencies—not just in HR skills but in general business and interpersonal skills, and in technology. The article addresses new kinds of delivery philosophies and mechanisms—finding the right delivery for the right kind of training. It then presents an overview of the general curriculum for Andersen's consulting professionals and the specialized curriculum for those concentrating on HR delivery. © 1999 John Wiley & Sons, Inc.

The “New HR” and the new HR consultant: developing human resource consultants at Andersen Consulting

This article deals with the manner in which Andersen Consulting trains its HR consultants. In the face of the new complexity of HR, where new executive buyers are demanding HR solutions with business value, new ways must be found to bring professionals to high performance levels. Consultants must be armed with a broader and deeper set of competencies—not just in HR skills but in general business and interpersonal skills, and in technology. The article addresses new kinds of delivery philosophies and mechanisms—finding the right delivery for the right kind of training. It then presents an overview of the general curriculum for Andersen's consulting professionals and the specialized curriculum for those concentrating on HR delivery. © 1999 John Wiley & Sons, Inc.

Getting to parallel: Assessing the return on expectations of training

Performance ImprovementVolume 37, Issue 8 p. 21-26 Article Getting to parallel: Assessing the return on expectations of training Daniel McLinden, Daniel McLinden daniel.j.mclinden@ac.com Dan McLinden directs the Evaluation & Performance Measurement Team for Andersen Consulting at the Center for Professional Education in St. Charles, Illinois. Over the course of his career in human resource development in business, his consulting efforts have included program evaluation, needs assessment, testing, and organizational assessment. Dr. Mchinden's current focus is on conceptualizing program impact and the evaluation of investments in the development of human resources. Much of his current work in writing and presentations has focused on the importance of linking program conceptualization and evaluation. He may he contacted by mail: Andersen Consulting, Center for Professional Education, 1405 North Fifth Avenue, St. Charles, IL 60174-1264;Search for more papers by this authorWilliam M. K. Trochim, William M. K. Trochim wmtl@cornell.edu William M.K. Trochim is a professor at Cornell University in the field of Program Evaluation and Planning in the Department of Policy Analysis and Management. Dr. Trochim is also the creator of the concept-mapping and pattern-matching methods, the programmer of The Concept System computer program, and a cofounder of Concept Systems, Inc. He may be contacted by phone: (607) 272-1206; by mail: Room 132 MVP, Hall, Cornell University, Ithaca, NY 14853 or Concept Systems Inc., 118 Prospect Street, Suite 309, Ithaca, NY 14850;Search for more papers by this author Daniel McLinden, Daniel McLinden daniel.j.mclinden@ac.com Dan McLinden directs the Evaluation & Performance Measurement Team for Andersen Consulting at the Center for Professional Education in St. Charles, Illinois. Over the course of his career in human resource development in business, his consulting efforts have included program evaluation, needs assessment, testing, and organizational assessment. Dr. Mchinden's current focus is on conceptualizing program impact and the evaluation of investments in the development of human resources. Much of his current work in writing and presentations has focused on the importance of linking program conceptualization and evaluation. He may he contacted by mail: Andersen Consulting, Center for Professional Education, 1405 North Fifth Avenue, St. Charles, IL 60174-1264;Search for more papers by this authorWilliam M. K. Trochim, William M. K. Trochim wmtl@cornell.edu William M.K. Trochim is a professor at Cornell University in the field of Program Evaluation and Planning in the Department of Policy Analysis and Management. Dr. Trochim is also the creator of the concept-mapping and pattern-matching methods, the programmer of The Concept System computer program, and a cofounder of Concept Systems, Inc. He may be contacted by phone: (607) 272-1206; by mail: Room 132 MVP, Hall, Cornell University, Ithaca, NY 14853 or Concept Systems Inc., 118 Prospect Street, Suite 309, Ithaca, NY 14850;Search for more papers by this author First published: 07 February 2007 https://doi.org/10.1002/pfi.4140370806Citations: 14 AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume37, Issue8October 1998Pages 21-26 RelatedInformation

‘Consumer-centric’ disease management - the way forward

Many people argue that there is still no definitive proof that disease management (DM) works. One reason for the largely suboptimal performance of DM programmes is a lack of integration in health management. Speaking at the third annual Disease Management Congress [Washington, DC, US; September 1998], Dr Deleys Brandman of Andersen Consulting described an innovative approach to DM that attempts to integrate care at the patient level.

THE EXPERT’S OPINION

Sean P. Sears is the President of Keltic Technologies Group Inc. Keltic supplies IT systems integration with a focus on Wide Area Network connectivity. It also has extension learning centres throughout Atlantic Canada providing both certified and application training. Keltic is a publicly traded company on the Toronto Stock Exchange and one of Atlantic Canada’s fastest growing companies. Keltic’s business focus centers on Interconnectivity: “The products and services that enable companies to more effectively communicate to employees, customers, suppliers and partners.†Sean is a native of Antigonish and a graduate from St. Francis Xavier University with a BBA in Information Systems and is also a graduate of Dalhousie University with an MBA. Prior to joining Keltic, Sean was President and co-founder of Cycor Communications, Canada’s first national Internet Service Provider. From 1983 to 1995 Sean held various senior positions with Andersen Consulting including general manager for the Atlantic Region for five years.

Andersen Consulting launches research into Chinese automotive industry

Andersen Consulting launches research into Chinese automotive industry

Anatomy of a learning organization: turning knowledge into capital at Andersen Consulting

Much has been written about knowledge management and ‘learning organizations’. But what type of organization structure best supports becoming a learning organization? In this article, we describe a conceptual model of the learning process that applies to individuals, to teams, to divisions and to an organization as a whole. Related to the learning processes, we describe three different types of knowledge—experiential, formalized, and emerging—and explain how each type requires a different style of management. A key contribution of our research is insight into the need to manage emerging knowledge; today, most organizations fail to recognize how to capture and manage this type of knowledge. We describe two organizational elements that are new relative to traditional organizations. We conclude by relating the various learning processes and the associated types of knowledge into an ‘anatomy of a learning organization’. Throughout this article we use indented italicized paragraphs to describe various aspects of Andersen Consulting's change journey1 to become more of a learning organization. © 1998 John Wiley & Sons Ltd and Cornwallis Emmanuel Ltd.