FROM THE ARCHIVE

Andersen faces rocky future

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WEDNESDAY, JANUARY 16, 2002

"Arthur is rolling in his grave as we speak."

The way auditing firm Arthur Andersen has been hit by the Enron debacle could spell the end of the company but many say the troubles began long ago.

The firm was forced to pay $110 million last year to settle claims it approved a false audit for Sunbeam Corp. Andersen recently settled a $220 million class action claim over its accounting with Waste Management Inc. and paid a $7 million fine to the Securities Exchange Commission (SEC).

The SEC has been investigating the firm's Enron account since last fall. It turns out that the lead Enron auditor, David B. Duncan, had told employees to shred documents related to the energy company one day after the SEC said it would investigate.

The destruction continued until the SEC issued a subpoena against the company, Andersen has admitted. Duncan was fired yesterday.

Andersen's audits had been questioned in a letter from a vice president to Enron Chairman Ken Lay. The House Energy and Commerce Committee, which is investigating Enron's fall, released a full text of the letter yesterday.

Andersen was retained by the Department of Interior in the 1990s to conduct an accounting of the tribal trust. After a five-year effort, described recently by a senior trust official as disappointing, that cost $12 million, the company said $2.3 billion was unaccounted.

Andersen then estimated it would take millions and years more to account the Individual Indian Money (IIM) trust.

Get the Story:
Scandals Put Andersen's Future at Risk (The Washington Post 1/16)
Andersen Dismisses Lead Enron Auditor (The Washington Post 1/15)
The Essentials Of a Washington Scandal (The Washington Post 1/15)
Arthur Andersen Fires an Executive for Enron Orders (The New York Times 1/16)
For Andersen and Enron, the Questions Just Keep Coming (The New York Times 1/16)
Author of Letter to Enron Chief Is Called Tough (The New York Times 1/16)
The Imploding Memo (The New York Times 1/16)
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Relevant Links:
Arthur Andersen - http://www.andersen.com
Enron - http://www.enron.com/corp

Related Stories:
Enron warned of imploding situation (1/15)
Enron debate a political gamble (1/14)
Auditor Andersen's name in 'tatters' (1/14)
Enron subject of criminal investigation (1/10)
Cheney met with failed Enron Corp. (1/9)
Colo. tribe an Enron investor (1/7)