Andersen to Cease Auditing Publicly-Held Companies

After 89 years of doing business, Big Five firm Arthur Andersen LLP has informed the Securities and Exchange Commission (SEC) that it will cease practicing before the Commission by August 31, 2002. Andersen was found guilty of the federal crime of obstruction of justice in the U.S. District Court in Houston on Saturday, June 15. An SEC rule prevents any firm convicted of a felony from signing off on financial statements of companies that are registered with the SEC.

The SEC has agreed to allow Andersen to continue to make required filings on behalf of its clients until August 31 in order to assure a smooth transition as those clients move to other accounting firms.

It is expected that state accountancy boards across the country will soon begin rescinding Andersen's license to practice in their states.

The remaining Big Four accounting firms had made contingency plans in case the Andersen jury returned a guilty verdict, including planning for the potential mass increase of Andersen partners and personnel in the job market. Andersen has already had discussions with its rival firms and has begun making arrangements to begin the transition of clients.

Andersen: The Story So Far

Andersen: Updated List of Client Defections


Already a member? log in here.

Editor's Choice

Upcoming CPE Webinars

Dec 3The materials discuss the concepts and principles in the AICPA’s new special purpose framework.
Dec 8Kristen Rampe will cover how to diffuse the tension in challenging situations in this one-hour webinar.
Dec 9A key component to improving your firm’s workflow efficiency while enhancing your profitability at the same time is how you leverage emerging technologies.
Dec 16Kristen Rampe will give tips on how to bring confidence into the room and build a valuable network.