Andersen recovers missing Enron files
ANDERSEN, the accountancy firm caught in the Enron scandal, has recovered thousands of electronic files relating to the Enron audit.
The recovery of back-up files — including e-mails and duplicates of paper documents that were shredded — will help the investigation into the collapse of the Houston-based energy trading group. Andersen admitted on January 10 that individuals in the firm had disposed of a “significant but undetermined” number of electronic and paper documents relating to Enron.
David Duncan, the lead Enron audit partner, was subsequently dismissed, while three other partners have been sent on leave. Andersen said a systematic search for deleted files was continuing.
It was also revealed that Kenneth Lay, Enron’s chairman, disposed of shares worth $3.5 million (£2.4 million) only five days after being warned that Enron could “implode in a wave of accounting scandals”. Details of the share disposal, which was made in two tranches on August 20 and August 21, emerged yesterday amid a congressional inquiry into Enron’s collapse. It is already known that Mr Lay sold huge amounts of Enron stock between 1999 and July 2001 through 350 transactions.
Mr Lay collected $101.3 million through these share sales, which were completed when Enron’s stock was worth up to $86 per share. The price he originally paid for the shares in unknown. Enron’s stock is now virtually worthless.
Mr Lay’s August transactions came only five days after Sherron Watkins, an Enron vice-president, wrote to him, expressing her fears about the company’s accounting techniques. Ms Watkins was prompted to write the letter by the abrupt resignation of Jeffrey Skilling as Enron’s chief executive on August 14.
Mr Lay sent a circular e-mail to employees on August 21, the day of the final trade, saying he was working to make sure that Enron would soon have “a significantly higher stock price”. Two months later, the SEC began investigating Enron and by December 2, Enron, formerly the seventh largest company in the US, had collapsed into bankruptcy.
In other developments, Max Yzaguirre, a former executive at the energy company, resigned yesterday from the Texas Public Utility Commission. It also emerged that Enron had made $700,000 of election campaign donations to several members of the congressional committees investigating the company’s collapse. Instead of dropping out of the investigation, however, many of the Senators and Representatives have said that they will pass on the money to charity.
Senior UK accountancy figures launched a robust defence of UK auditing practices, saying standards have improved dramatically since the scandals of the early 1990s. Kieran Poynter, UK senior partner of PricewaterhouseCoopers (PwC), auditor to nearly half the FTSE 100 companies, said vetting of audit work goes much further than in the US.
Mr Poynter said: “Every now and then reviews find a case where somebody might have been careless. It doesn’t happen twice. We have a zero-tolerance approach to failures.”
Rodger Hughes, overall head of audit at PwC, said: “The worst thing a partner can do is sign a duff audit opinion. There is no greater crime.”
Attention FR nerds: Not that there's anything wrong with that.
BTW, just wondering, how is it that this came from a UK source? Dated tomorrow - for the US?
Just figured that ABC / NBC / CBS / CNN would have this plastered all over by now with a headline / lead to the effect, "Missing files possibly linking the Bush Administration to the Enron fiasco FOUND!"
LVM
January 18, 1996 WASHINGTON (CNN)
-- The personal assistant to President Clinton is taking at least part of the blame for the long delay in turning over Rose Law Firm billing records to the Senate Whitewater Committee.
"
Synchronicity! Calling Art Bell.
I bet you a dollar to a donut that Enron execs didn't expect this.
THe strangest thing in modern times is how every product on earth has improved, except for the Lie detector and the pill that turns water into gasoline. The latter is understandable-it's the profit motive. Hell, the former is equally understandable: a dependable lie detector would put all judges, lawyers and politicians out of work,even as it put the real criminals in prison and the real killers on death row, and exposed the anti-death penalty zealots for the masochistic lovers of Sadist that they are.
The same truth that shall make you free, shall free truth from the liars that hold it captive.
So I take this sudden "recovery" of "lost" documents on Anderson's part as, "oh yeah?? Well if you're gonna be that way about it, so much for the 'united front' defense of 'we can't find the incriminating documents', if you're going to try to pin this on us, we've got enough documents to lay most of the blame at *your* door..."
The fun is just beginning.
I don't know its current status, but Andersen used to be #1. If that is still true, and remains true, so much the worse for the accounting biz.