Andersen is no longer the only accounting firm taking the heat on the recent Enron implosion.
BusinessWeek is reporting this week that congressional investigators are now inquiring about the role of PricewaterhouseCoopers in the structuring and certification of some of those off-balance sheet partnerships of Enron.
On two occasions -- in August, 1999, and May, 2000 -- PwC was engaged to assert that Enron was getting a fair deal when it exchanged its own stock for options and notes issued by the partnerships created by Enron CFO Andrew Fastow.
At issue for congressional investigators is the fact that PwC was offering tax advice for one of the partnerships - LJM2 Co-Investment - while at the same time advising Enron as to the value of that partnership.
PwC acknowledges the work, but insists that it was done by two separate teams who did not share information between each other. Further, PwC asserts that their approach to this work was in compliance with ethical standards set up for the profession.
Given the huge losses ultimately sustained by the LJM2 partnership, Enron shareholders may look to the deep pockets of PricewaterhouseCoopers to help offset their losses.
At best this investigation will be an embarassment for PwC. At worst it will entangle the Big Five firm in the financial retributions being sought in the whole Enron affair. Stay tuned...