Tempers are flaring in the U.S. District Court in Houston where Judge Melinda Harmon has accused defense attorney Rusty Hardin of attempting to present evidence in an "underhanded" fashion. Late last week, after the jury had been dismissed, Mr. Hardin discussed with Judge Harmon the possibility of attempting to introduce into evidence at Andersen's obstruction of justice trial a copy of a bill the firm sent to Enron last fall for services relating to Enron's Securities and Exchange Commission inquiry.

On May 16, 2002, the European Union (EU) issued long-awaited guidelines on auditor independence in an effort to avoid an Enron-type incident. Among other things, the guidelines recommend that accounting firms rotate audit partners after seven years with the same client and partners wait two years before joining a company they have audited. The recommendations are not binding. Each country is free to adopt stricter requirements. AccountingWEB's sister site in the U.K.

Former Andersen partner and leader of the firm's Enron audit team, David Duncan, returned to the U.S. District Court in Houston on Tuesday, May 14, for his second day of testimony. Mr. Duncan is considered to be the lead witness for the prosecution's obstruction of justice case against Big Five firm Andersen.On his first day of testimony, Mr.

Andersen got more bad news in court Friday as the firm's obstruction of justice trial continued into its fifth day. U.S. District Court Judge Melinda Harmon ruled that attorney-client privilege protects the notes of prosecutors' meetings with former Andersen partner and Enron audit engagement leader David Duncan who is expected to be the lead witness for the prosecution. Mr.

Thursday's proceedings in the Andersen obstruction of justice trial saw the prosecution introduce testimony from Andersen personnel in an attempt to establish that members of the Big Five firm knew of accounting irregularities at Enron long before last fall's massive document destruction began.Andersen partner Ben Neuhausen testified that he destroyed 150 to 200 e-mail messages relating to Enron after the Houston office received a memo from Andersen lawyer Nancy Temple reminding them of the firm's document retention policies. Mr.

The American Institute of CPAs (AICPA) has released a practice aid for accounting firms that conduct audits of publicly-owned companies. It expects some of these firms will be taking on increased numbers of new publicly traded clients and professional staff following the Enron collapse.

Lawyers for the Department of Justice and Arthur Andersen LLP gave opening arguments Tuesday in U.S.

Auditors may soon be prohibited from playing a controversial role in structuring transactions to achieve a desired effect on financial statements. The change would take effect under a draft of an auditing standard proposed by the AICPA's Auditing Standards Board (ASB) on April 30, 2002.

At a time when many prominent accounting opinion leaders seem to be focusing externally on the audit reforms others should undertake, Deloitte & Touche (D&T) CEO James Copeland took the lead in publicly addressing the audit improvements his firm has undertaken on its own. Speaking to the Economic Club of Detroit on April 29, 2002, Mr. Copeland explained five specific audit improvement initiatives. D&T is considering a rotation requirement for client service personnel below the partner level and for audit partners who lead subsidiary audits.