Andersen's Future at Stake After Enron

Reuters ^ | Friday, January 11, 2002 | Deepa Babington

[Dog Gone]

Destruction of records in anticipation of a subpoena is just as bad as doing it afterward. I don't know how often that happens, and I know it's strictly forbidden at the companies where I have worked.

But I've never been involved in a situation where my own conduct couldn't stand the scrutiny of a court. I think it's entirely possible that if I were, I might rationally decide that destroying evidence of wrongdoing might be the best course of action. Let the company take the heat and personally deny, deny, deny.

My hunch is that this is exactly what happened here.

[Ragtime Cowgirl]

Have you done a basic Google search? The press can't be bothered, it seems, but there are over 4000 webpages using keywords "Andersen Consulting" and "Clinton"-
Hmmmmm?

[Bush2000]

Time to dump Andersen stock?

[Poohbah]

Are they publicly traded? Most accounting and consulting firms aren't...

[aculeus]

They've been known as arrogant money-grubbers for years.

Many of us who have had contact with them will enjoy their coming collapse.

[Ragtime Cowgirl]

Here's just one of many revelations. Clinton and Andersen Consulting and Gore worked very, very closely together...pals with the UN. New World Order, vast left wing conspiracy alert!

"Technology is a powerful force to enhance the lives of people around the globe as well as a powerful engine of economic growth," says Vernon Ellis, chairman of Andersen Consulting, the company charged with developing a strategy and framework for the G8 leading industrial countries on the digital divide.

Recognising this, Mbeki has worked with US president Bill Clinton, representatives of the Japanese government and others in seeking commitments from the developed world to take action to ensure that the digital divide is overcome before 2010.

Momentum is gathering - there is the G8's Okinawa Charter on the Global Information Society, Japanese Prime Minister Yoshiro Mori's Comprehensive Co-operation Package to address the international digital divide, the Global Call to Action issued by Clinton and endorsed by a broad cross section of US private sector interests, and the Opportunity Initiative (see box).

More recently, Mbeki urged delegates at this month's UN Millennium Summit in New York to use the available "capital, technology and human skills to end poverty and underdevelopment".
Gap Between Rich and Poor Widens, Sept. '00.

[independentmind]

But I've never been involved in a situation where my own conduct couldn't stand the scrutiny of a court. I think it's entirely possible that if I were, I might rationally decide that destroying evidence of wrongdoing might be the best course of action. Let the company take the heat and personally deny, deny, deny.

Neither have I.

My guess is that internal electronic communication among the staff is one thing that's missing. It is there that you might see internal disagreement about how various accounting issues were treated. You would also get a feel for the supervision and training of the staff.

I doubt that the majority of the staff purposely was involved in wrongdoing. Auditing firms are extremely hierarchical--what the audit partner says, goes.

[Dog Gone]

Time to dump Andersen stock?

If it were a publicly traded company, the time would have been about two months ago.

If I worked for Andersen, I would definitely be spending a part of each day actively looking for a new employer.

[Bush2000]

Are they publicly traded? Most accounting and consulting firms aren't...

A lot of private corporations issue stock, too...

[Poohbah]

If you are holding Arthur Andersen stock, it's publicly traded.

[independentmind]

It's kinda hard to dump stock in private corporations since there is no public market in which to sell it.

[4Freedom]

I knew a former Arthur Anderson accountant, in the late 80's/early 90's, that went from zero to $10 million net worth, in the blink of an eye, when he started a natural gas transportation and management business in Chicago. His biggest supplier was Enron. Coincidence?

[Dog Gone]

My guess is that internal electronic communication among the staff is one thing that's missing.

I would be surprised if missing emails aren't at the heart of it. But as most people know by now, deletion of an email by a company employee doesn't really delete it. It came through the company server and an electronic record of it should still exist. If it doesn't, then it had to have been a conspiracy to destroy those electronic records, because the capability to do so is beyond that of any employee directly involved in the audit.

That's why I'm very curious to find out exactly what "documents" are missing.

[Bush2000]

It's kinda hard to dump stock in private corporations since there is no public market in which to sell it.

Some people sign contracts that entitle them to sell private at a specific price.

[airedale]

Bet they didn't go into the backups and delete the material there. Also I seriously doubt that they went in and used something like TweakUI to delete all the really really hidden files in their windows systems that keep track of just about every keystroke you make. They are pretty much all accessible if you know how to get at them and the FBI does and that's why they seize hard disks.

[jackbill]

After Navy service, my son got an accounting degree and his CPA - and went to Andersen because his father-in-law is a retired "partner". After a couple of years he left. And is he glad that he did.

Anybody in the lower levels of Andersen should update their resumes. They're going to need them.

[SevenDaysInMay]

FASBs will not save AA for their complicity in the management failure at Enron. "Materiality" as determined by the financial markets dictate "materiality" for AA's reporting. AA's utter failure to include the games played in finacial/annual reports ought to wipe AA LLP as clean as Enron.

AA has committed an unforgivable sin in the world's financial Garden of Eden. It's a rotten apple.

[neverquit]

My son is a CPA as well and agrees that these folks need to go to jail. Show up at your next tax audit and informer the IRS that you destroyed all your records and see what happens to you. On second thought, don't do that!

[BrucefromMtVernon]

No, the reputation of Andersen has not been sullied. Arthur Andersen is being eliminated/terminated.

[Dog Gone]

That's the bottom line. Even without the new revelations about Andersen's apparent coverup regarding internal documents, they were toast.

Previously, they could have pleaded incompetence in certifying Enron's financial condition. That might have prevented criminal prosecution of the auditors (or maybe not) but it still would have finished them as a company.

This new revelation changes the presumption to them being crooks without very good judgment.

It's like the famous law school question of whether somebody who jumps out of a skyscraper but is shot as he is falling has been murdered. It's important for a lot of reasons, but the dude is still dead.