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Watch the documentary, "The Smartest Guys in the Room," paying special attention to the role played in the Enron fiasco by the accounting firm, Arthur Andersen. Then answer the following questions.
- How important should AA's former, excellent reputation have been in determining how to punish it in the role it played in the Enron case? Explain your answer.
- Enron was only the last of a series of ethics scandals that AA had fallen into. How should it have adjusted to prior scandals? (Are the Federal Sentencing Guidelines of any help here?)
- Consider that Sarbanes-Oxley was passed largely in response to Enron. Do its provisions go far enough to prevent future Enrons? Do they go too far?.
- Using the table that summarizes punishment options provided by French and Fisse, how would you construct a punishment for Arthur Andersen? Who should be targeted? Should the company's black box be left alone? Is it better to attack financial or non-financial values? Should Arthur Andersen and other corporate offenders be encouraged to reform themselves or should those reforms be designed and directed from the outside?
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