Arthur Andersen: New Woes in Arizona

As if a series of pending lawsuits regarding a controversial audit of the Baptist Foundation of Arizona weren't enough to keep the sunbelt accountants busy, now it seems the Big Five firm of Arthur Andersen has been the subject of yet another investigation.

Andersen's 1994 audit of home builder UDC Homes, Inc. produced a clean bill of health for the company's financial statements. Shortly after the audit, UDC filed for bankruptcy.

Earlier this week the Arizona Attorney General's office announced an out-of-court settlement with Andersen regarding the UDC audit. The accounting firm agreed to pay $755,000; two Andersen accountants, Dan Nahom and Charles McLane, received letters of concern in their licensing files; and all firm members who were on the audit engagement team will be required to take an ethics course.

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