Lieberman on Andersen: 'Enron Episode May End This Company's History'
Posted by AccountingWEB in Community News on 01/14/2002 - 14:54
Senator Joseph Lieberman (D-CT), chairman of the Senate Governmental Affairs Committee, one of the several government agencies investigating the Andersen/Enron affair, appeared on CBS's Face the Nation on Sunday, and described what he said may be criminal activity on the part of Big Five firm Andersen.
"We know that Arthur Andersen, the supposedly independent auditor, covered up facts very relevant to the condition of Enron," said Sen. Lieberman. "Arthur Andersen is a great company with a great name. That name is being sullied and ultimately this Enron episode may end this company's history."
On Sunday, Time Magazine released a story in which it described a memo that went out to Andersen employees on October 12, just four days before Enron disclosed its $618 million loss which paved the way for the energy giant's spiral downward into bankruptcy proceedings. The Andersen memo directed workers to destroy all audit material relating to Enron, except for the most basic "work papers."
The article went on to state that supervisors at Andersen reminded their employees of the order to destroy documents several times in the weeks leading up to the formal investigation that was launched by the Securities and Exchange Commission in November. It has not been determined if orders to destroy documents at Andersen continued after SEC subpoenas were issued.
Echoing Sen. Lieberman's comments, J. Edward Ketz, associate professor and director of the M.B.A. program at Pennsylvania State University was quoted in the New York Times as saying, "Things look very bleak for Andersen. There's a chance that they could go under on this one."
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Gail Perry, CPA
Repurcussions
Audit partners in accounting firms worldwide are worried about the impact of Andersen-Enron on the profession and their livelihood.Clients would trust auditors less, audit committees ask more questions, new oversight boards, greater pressure on fees.Andersen and its practices is especially more shameful given that it is supposedly a role model and prestigious Big 5 firm. It is a sinking ship unless Andersen employees worldwide help underwrite any fines and suits it may suffer. Even then the PR to salvage the firm is and would be a nightmare.
Don´t agree.
I do not agree with you.It is silly to think that, due to a painful practice from a dismissed partner, a whole respectable company must to "pay" with its wellknown credibility.Do you know how many people work worlwide for Andersen? Do you think everybody from them share the same regretful practice? That is silly.
Nevertheless, and as former Andersen´s employee in Barbera del Valles, Spain, I find this case a shame and I hope that Mr.Berardino will take the appropiate decisions to clarify it.
Re: Sinking Ship
It's painful to admit, but the activity that is under such scrutiny in our Houston office is common, not only at Andersen, but at the other firms as well. Speaking from experience, the electronic era in which we are currently part of has not exactly helped paper documentation preservation; electronic copies of final reports and memos is often times the extent of existing documentation. The paper trail of old is no longer in many cases. This is something that the industry as a whole needs to examine… not just Andersen.
A Sinking Ship? I don't think so!
I am sure that most intelligent people will realize that the entire firm did not have a thing to do with the Enron fiasco. I speak for myself, but I am not holding the thousands of professional, ethical staff at Andersen accountable for a few bad seeds.
Andersen has been and I am sure will remain in tact...they may have hit an ice burg, but they have not begun to take on water...Give credit to the thousands of professional, ethical staff at Andersen and give them a break!
Ps – I don’t work for Andersen, nor have I ever….
History???
The saddest thing is that I have friends in Andersen and it is too late to leave the sinking ship. The job market is not very healthy and having Andersen in one's resume ain't a plus no more. In any case, Andersen should be suspended from doing audits. Their record management policy is a firm-wide policy and not just confined to the Houston ofice. Policies and orders always come from the top. I also read of investigations into Andersen in UK, Hong Kong and Australia. I'm surprised if they do not become history.