PwC Now Added to The Probe in Enron Partnership Deals

Andersen is no longer the only accounting firm taking the heat on the recent Enron implosion.

BusinessWeek is reporting this week that congressional investigators are now inquiring about the role of PricewaterhouseCoopers in the structuring and certification of some of those off-balance sheet partnerships of Enron.

On two occasions -- in August, 1999, and May, 2000 -- PwC was engaged to assert that Enron was getting a fair deal when it exchanged its own stock for options and notes issued by the partnerships created by Enron CFO Andrew Fastow.

At issue for congressional investigators is the fact that PwC was offering tax advice for one of the partnerships - LJM2 Co-Investment - while at the same time advising Enron as to the value of that partnership.

PwC acknowledges the work, but insists that it was done by two separate teams who did not share information between each other. Further, PwC asserts that their approach to this work was in compliance with ethical standards set up for the profession.

Given the huge losses ultimately sustained by the LJM2 partnership, Enron shareholders may look to the deep pockets of PricewaterhouseCoopers to help offset their losses.

At best this investigation will be an embarassment for PwC. At worst it will entangle the Big Five firm in the financial retributions being sought in the whole Enron affair. Stay tuned...

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...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.