Good-Bye Andersen: Venerable Giant Will Audit No More

"As of this day, Arthur Andersen LLP has voluntarily relinquished, or consented to revocation of, its firm permits in all states where it was licensed to practice public accountancy with state regulators," said the former Big Five accounting firm in a statement on Saturday.

Life as Arthur Andersen accountants knew it began unraveling last January when the firm admitted that members of the firm shredded thousands of documents relating to the infamous Enron audit. While contending that the document destruction was all done according to company policy, evidence presented in later court proceedings indicated that the destruction was done after knowledge had been received of a Securities and Exchange Commission investigation.

In June, the firm was found guilty of obstruction of justice, a verdict that essentially sealed the fate of the doomed accounting firm. Although the firm has announced plans to appeal the guilty verdict, the ultimate outcome will not affect Andersen's audit practice.

The U.S. practice, which once boasted nearly 28,000 employees, has been pared down to fewer than 3,000 employees, most of whom are providing services in the areas of negotiating with landlords to end lease agreements, working with auditors from new firms to oversee the transition of audit workpapers, and providing training services at the Andersen training center. Also left behind are a crew of lawyers who will continue to field the numerous lawsuits pending from shareholders and creditors of former clients and retired partners hoping to save a portion of their pension funds.

Throughout this year all of the U.S. firm's publicly held audit clients have sought accounting services elsewhere. Andersen offices across the country have closed, with clients and personnel merging with rival firms. Worldwide, the story is similar. Andersen firms throughout the world have announced mergers with or sales to rival firms.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.