Tags: Arthur | Andersen | Fires | Enron | Auditor

Arthur Andersen Fires Enron Auditor

Tuesday, 15 January 2002 12:00 AM

Andersen said it would fire anyone who deliberately destroyed Enron's e-mail or documents. Duncan and Thomas H. Bauer, Debra A. Cash and Roger D. Willard could face additional disciplinary action, Andersen said in a statement.

"We promised to be forthright and to take action where appropriate," said Joseph F. Berardino, managing partner and chief executive officer. "This was a painful decision, but it was absolutely the right thing to do. We are prepared to take all appropriate steps necessary to maintain confidence in the integrity of our firm."

In an exercise in damage control, Berardino said four other partners - D. Stephen Goddard Jr., Michael M. Lowther, Gary B. Goolsby and Michael C. Odom - had been "relieved of their management responsibilities" and that a new management team would head the Houston office. Enron's corporate headquarters were in Houston.

Enron, once a huge energy conglomerate, allegedly hid $500 million to $600 million in losses on its balance sheet. Auditors allegedly improperly destroyed or deleted paper documents and thousands of e-mail messages that had been subpoenaed by the Securities and Exchange Commission on Nov. 8.

Most of the e-mail, which might have shown evidence of fraud, were discarded in the days after an urgent meeting called by the Houston office's chief partner on Oct. 23 shortly after Enron was contacted by the SEC about its accounting and reporting.

The SEC sent Andersen a subpoena on Nov. 9. A day later the lead partner's assistant sent an e-mail ordering secretaries to "stop the shredding."

Andersen last week said it was able to retrieve some of the trashed documents from electronic backup files and might recover more.

The collapse of Enron, whose shares were delisted by the New York Stock Exchange Tuesday, cost rank and file employees most of their company-stock retirement nest eggs as well as their jobs in one of the biggest corporate bankruptcies in U.S. history.

Enron stock was suspended on the NYSE trading at 0.67 cents a share.

Senior Enron employee Sherron S. Watkins, in an unsigned seven-page letter in August, warned Enron's former chairman and CEO Kenneth Lay the company's accounting practices could "implode in a wave of accounting scandals." Excerpts of her letter were released by the House Energy and Commerce Committee.

"Based on our actions today, it should be perfectly clear that Anderson will not tolerate unethical behavior, gross errors in judgment or willful violation of our policies," said Berardino.

Copyright 2002 by United Press International.

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Andersen said it would fire anyone who deliberately destroyed Enron's e-mail or documents. Duncan and Thomas H. Bauer, Debra A. Cash and Roger D. Willard could face additional disciplinary action, Andersen said in a statement. We promised to be forthright and to take...
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Tuesday, 15 January 2002 12:00 AM
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