Andersen, Arthur Edward

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ANDERSEN, ARTHUR EDWARD

Arthur Andersen (1885–1947) was the founder and senior partner of Arthur Andersen and Company, the Chicago-based accounting firm that grew to become an international company known for its many services, including auditing, tax services, and specialty consulting in areas such as technology applications. Andersen established his company's focus on maintaining a strong organization through education, training, enlightened corporate policies, and a fundamental understanding of economic and business trends.

Born in 1885, Andersen achieved early success. In 1908, at age twenty-three, Andersen was the youngest Certified Public Accountant (CPA) in Illinois and one of only 2200 CPAs in the country. The previous year he had joined Price Waterhouse and Co. as a senior accountant, a position he held until 1911, when he joined Jos. Schlitz Brewing Company as controller.

While working as an accountant in the private sector, Andersen was also teaching accounting at the college level. At just twenty-seven years of age he was asked to head the department of accounting at Northwestern University. He received his Bachelor's degree from Northwestern five years later in 1917.

In 1913 Andersen and a partner, Clarence DeLany, founded their own accounting firm, Andersen, DeLany and Company. The firm soon had important corporate clients, including ITT, Briggs and Stratton, Colgate-Palmolive, and Parker Pen. Delany left the firm in 1918 when it adopted its current name, Arthur Andersen and Company. Under Andersen's direction the firm, which was licensed in most states to offer accounting and auditing services, grew quickly.

Andersen considered himself an educator—he continued to teach at Northwestern for a decade after the founding of Andersen, DeLany and Company. Simultaneously, he continued his work as an accountant. In 1953, when he was elected to the Accounting Hall of Fame at Ohio State University, he was cited for his "contributions as an educator and outstanding practitioner."

Throughout his career, Andersen emphasized a broad view of the accountant's role: "The thoroughly trained accountant must have a sound understanding of the principles of economics, of finance, and of organization. It has been the view of accountants up to this time that their responsibility begins and ends with the certification of the balance sheet and statement of earnings. I maintain that the responsibility of the public accountant begins, rather than ends, at this point." Under the motto "Think Straight-Talk Straight," Andersen challenged traditional accounting practices by going beyond the balance sheet to understand the effect of sheer numbers on a particular business. Thus, members of the firm were encouraged to use their auditing skills to contribute to a client's overall success.

Anderson's reputation grew and he was invited in 1938 to become the first salaried president of the New York Stock Exchange. He declined the offer in order to devote his energies to his expanding accounting practice. By the end of the twentieth century Arthur Andersen and Co. was among the largest of the nation's Big Six accounting firms.

Throughout his life Arthur Andersen was active in professional organizations, civic and community services, and education. He wrote numerous articles for professional journals and several pamphlets on economic issues. He was widely recognized as an authority on financial affairs and was often called upon to provide expert analysis in legal cases and advice as a member of various boards. He served as chairman of the board of Certified Public Accountant examiners for the state of Illinois; director of the State Bank and Trust Company of Evanston, Illinois; trustee for Chicago's Century of Progress, and president of the board of trustees at Northwestern University. Arthur Andersen died in 1947.