Andersen to Face Criminal Charges
Prosecutors for the U.S. Department of Justice informed Big Five firm Andersen that the firm will face criminal charges resulting from the Andersen's failure to prevent document shredding relating to the Enron engagement after it had become clear that Enron's accounting procedures were to be the subject of a federal investigation.
Andersen has been asked to enter a guilty plea with regard to federal obstruction of justice charges and a deadline for accepting that plea has been set for Thursday. The Justice Department has yet to announce how quickly it will act against Andersen if Andersen refuses to enter the guilty plea.
Industry experts surmise that the Justice Department is acting so quickly because of the stepped up pace of merger negotiations between Andersen and the other Big Five firms. The Justice Department "needs its pound of flesh" and needs to display to the public that Andersen is not getting off lightly, said one accounting industry consultant.
According to a report in the Washington Post, Andersen has taken the position that the blame for document shredding lies with members of the firm's Houston office and should not be assigned to other members of the accounting firm. The government is arguing that Andersen failed to create procedures that would require employees to keep documents that might be requested in legal proceedings.
Andersen is scheduled to meet with members of the Justice Department on Thursday to determine the next step for the beleaguered accounting firm.
It remains to be determined whether individual members of Andersen will face criminal charges.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.