Andersen's Bass Warned of Problems with Enron in 1999 | AccountingWEB

Andersen's Bass Warned of Problems with Enron in 1999

Documents released by the House Energy and Commerce Committee demonstrate that Andersen partner Carl Bass expressed concern and disagreement with accounting methods at Enron long before Enron's whistle-blower Sherron Watkins sent her memo warning that Enron "could implode in a wave of accounting scandals" in August 2001.

Mr. Bass's memos and e-mail messages, which were made public this week, date back to 1999, when the Andersen partner participated in a dialog with a superior in Andersen's Chicago headquarters regarding the Enron situation.

Some of Mr. Bass's memoranda include objections and concerns about Enron's special purpose entities known collectively as the Raptors which were used to keep hundreds of millions of dollars in debt off of Enron's financial statements. "I will honestly admit that I have a jaded view of these transactions" involving the Raptors, wrote Mr. Bass.

After making repeated and strenuous objections to various accounting practices of Enron, Mr. Bass was removed from the Enron engagement at Enron's request. The "client sees need to replace Carl," read one internal memo.

Mr. Bass is cooperating with federal authorities in their investigation of crimes committed by Andersen and Enron executives.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

WHAT KIND OF FIRM ARE YOU?
As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.