Arthur Andersen's History and Legacy

Arthur Andersen was founded in 1913 by Arthur E. Andersen in Chicago, Illinois.

The firm initially focused on auditing public companies, and by 1920, it had expanded to 15 offices.

In the early 20th century, Arthur Andersen became one of the largest accounting firms in the United States, with a presence in major cities across the country.

Arthur Andersen's growth and success were largely driven by its innovative approach to auditing, which emphasized independence and objectivity.

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Arthur Andersen's company history began with humble beginnings, as he started working as a mail boy by day and attended school at night, eventually becoming the youngest Certified Public Accountant in Illinois at age 23 in 1908.

In 1913, Andersen co-founded an accounting firm with Clarence DeLany, which was initially known as Andersen, DeLany & Co. This marked the beginning of what would become a renowned accounting firm.

The firm's name was changed to Arthur Andersen & Co. in 1918, after DeLany resigned, and Andersen's first client was the Joseph Schlitz Brewing Company of Milwaukee, where he had previously worked as a controller.

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Arthur E. Andersen's journey to founding his accounting firm began in 1885, when he was born in Plano, Illinois. He was orphaned at 16 and had to work hard to make ends meet.

Andersen's determination and drive led him to become the youngest Certified Public Accountant in Illinois at just 23 years old in 1908. He had graduated from the Kellogg School of Management at Northwestern University that same year.

After founding Andersen, DeLany & Co. in 1913 with Clarence DeLany, the firm changed its name to Arthur Andersen & Co. in 1918. This change occurred after DeLany resigned from the company.

Andersen's first client was the Joseph Schlitz Brewing Company of Milwaukee, where he had previously worked as a controller.

As part of Arthur Andersen's company history, many of its partner offices and local offices were relocated to new firms.

Accuracy was founded in 2004 by a team of seven former partners, and it's headquartered in Paris.

BearingPoint, formerly the US consulting unit spun off by KPMG, purchased Andersen business consulting practices in various countries.

Huron Consulting Group was formed by former employees of the Chicago office of Andersen.

Here's a list of some of the firms that absorbed or were formed by former Andersen partners:

Andersen Tax acquired the rights to the company name and changed their name from WTAS in 2014.

Accenture was a rival of Arthur Andersen, and in 2002, it acquired Andersen Consulting, the consulting arm of Arthur Andersen, for $1.2 billion.

Accenture was founded in 1989 as the consulting and internal services arm of Andersen Consulting.

Arthur Andersen's consulting business was sold to Accenture after the accounting scandal, and Accenture's acquisition of Andersen Consulting was finalized in 2001.

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The Enron scandal was a major blow to Arthur Andersen's reputation. The firm's auditing of Enron's financial statements was found to be lacking, with the Powers Committee concluding that Andersen did not fulfill its professional responsibilities.

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In 2001, Enron was found to have fraudulently reported $100 billion in revenue. This led to a scandal that would ultimately destroy the firm.

Arthur Andersen was convicted of obstruction of justice for shredding documents related to its audit of Enron. The firm's conviction was later reversed by the Supreme Court, but the damage had already been done.

Nancy Temple and David Duncan, two managers at the firm, were cited as responsible for ordering the shredding of documents. This action was seen as an attempt to cover up the firm's involvement in Enron's accounting scandal.

The firm's CPA licenses and right to practice before the SEC were surrendered on August 31, 2002. This effectively put the firm out of business.

Arthur Andersen had already started winding down its American operations after the indictment, and many of its accountants joined other firms.

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Arthur Andersen was the "gold-standard" in accounting, a leading audit and accounting firm and one of two sibling organisations under the Andersen Worldwide Société Coopérative (AWSC) umbrella.

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It was part of the "Big 5" at the time, which was a recent consolidation of the industry that was previously referred to as the "Big 8".

Arthur Andersen was located in the 33 West Monroe offices, which was blocks away from the office that Arthur Andersen himself once occupied.

The firm was also close to the famous Arthur Andersen training facility in St. Charles, which is still used today by companies such as Accenture.

Arthur Andersen was building up a sizable sub-unit called Business Consulting (BC) which was beginning to compete with Andersen Consulting.

This would eventually be the final straw that contributed to the split between Arthur Andersen and Andersen Consulting.

The split led to Andersen Consulting becoming Accenture, the original management consulting business that set the standard for what we see today across EY, PWC, Deloitte, and KMPG.

Arthur Andersen was nearly defunct by 2005, with only about 200 employees remaining from a high of 28,000 in 2002.

The company was left with nothing after the Enron scandal, and even if it had escaped, it would have likely been brought down by the massive accounting fraud at WorldCom.

Ownership of the partnership has been ceded to four limited liability companies named Omega Management I through IV.

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