WorldCom revealed that in addition to the US$3.8bn in expenses improperly recorded as capital, an internal audit discovered that US$3.3bn in profits were improperly recorded on its books from 1999 to the first quarter of 2002. This involved the manipulations of reserves set aside to uncover estimated losses such as uncollected payments from customers and judgments in law suits and other expected costs.

WorldCom’s chief executive, John Sidgmore, blamed the company’s former chief financial officer, Scott Sullivan, and the former controller, David Myers. The two were fired and arrested and charged with security fraud, conspiracy and other charges.

WorldCom’s auditors were Arthur Anderson, the same firm charged with Enron’s fraud as well as Tyco, Global Crossing and Adelphia all hit by financial malpractices and charged for financial fraud in the early 2000. Arthur Anderson charged with negligence, also accused Sullivan for withholding information from them.

Question

Discuss five (5) professional ethical consideration Arthur Andersen Auditing firm could have observed during the review of the financial statements of WorldCom company.