Arthur Andersen's double role with Enron represented a conflict of interest because .
A) Arthur Andersen made too much of a profit from one client
B) Enron did not reveal everything to Arthur Andersen that they should have
C) Arthur Andersen had incentive not to make criticisms that would hurt their consulting role
D) Arthur Andersen did not know their client well enough to be both consulting and auditing them

Question

Quizplus · Accepted Answer

Arthur Andersen's dual role as both a consultant and auditor for Enron meant that they had an incentive not to make criticisms or reveal negative information about Enron, as it could potentially harm their consulting relationship and thereby their revenue. This conflict of interest ultimately led to ethical and legal violations that damaged both companies.

Arthur Andersen's Double Role with Enron Represented a Conflict of Interest