Analyse Cas Andersen

Gueber

Anatole

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Andersen Case :

1. Analyze the causes of Andersen’s problems and advise the leadership.

1. Perform the role of a crisis management consultant to Joseph Berardino.

1. Reflect on the demise of Andersen and identify the root causes.

1) To begin with, here are the problems Andersen has encountered:

• Involvement in financial scandals: The firm has been involved in a number of financial scandals, including Enron, which have severely damaged its reputation.

• Questionable accounting practices: The firm has been accused of questionable accounting practices that have led to errors and omissions in the financial statements of certain client companies.

• Conflicts of interest: The firm was accused of conflicts of interest between its consulting and auditing activities, which called into question its integrity and impartiality.

• Loss of clients: The above events resulted in a significant loss of clients for the firm, reducing its revenues and commercial viability.

Therefore, to address these issues, the following guidance should be followed by managers:

• Transparency and accountability: Andersen's leaders should put policies in place to ensure transparency and accountability to stakeholders.

• Ethics: Leaders should establish a corporate culture that focuses on ethics and quality, rather than profitability and compliance.

• Internal controls and separation of consulting and auditing activities: Managers need to establish tighter internal controls to ensure audit quality and avoid conflicts of interest. In addition, management should separate consulting and auditing activities to avoid conflicts of interest.

• Winning new clients: Once the firm has taken full responsibility for its mistakes, it should pursue an effective communication strategy with the aim of finding new clients and bringing back old ones. Combined with the advice given earlier, the firm can hope to regain lost clients or attract new ones.

Ultimately, Andersen's leaders must focus on creating an ethical corporate culture and providing quality services to rebuild stakeholder trust and avoid the problems that led to the firm's demise.

1. Given the situation, here are the steps which are very similar to the advice given earlier that I recommend to Joseph Berardino to manage the crisis at Andersen:

• Admit mistakes and take responsibility: It is important for Andersen to admit past mistakes and take responsibility for its actions. This will help to restore stakeholder confidence and improve the company's image.

• Implement stronger internal controls: Andersen needs to implement stronger internal controls to avoid questionable accounting practices in the future. This may include establishing an independent ethics committee, reviewing conflict of interest procedures, and training employees on accounting practices and ethics.

• Restoring client trust: Andersen must work to restore client trust by demonstrating its commitment to ethics and transparency. This may include implementing a quality management programme to improve work processes, communicating regularly with clients and implementing risk mitigation measures.

• Engage external experts to assist with crisis management: Andersen should also consider engaging external experts to assist with crisis management, such as communications advisors and crisis management consultants. These experts can help develop effective communication strategies and manage the risks associated with crisis management.

Finally, it’s important for Joseph Berardino to demonstrate a strong commitment to restoring the company's reputation and integrity. This can be accomplished by taking concrete steps to right past wrongs, establishing a corporate culture of ethics and transparency, and clearly communicating the company's commitment to these values to all stakeholders.

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