The tragic proportions of Andersen's downfall
By Paul Merrion
Crain's Chicago Business
April 15, 2002
"For God's sake, let us sit upon the ground / And tell sad stories of the death of kings."
From Aristotle to Shakespeare's "Richard II," we know there are tragedies and then there are Tragedies.
Let us talk about the death of Andersen.
The CPAs have done their damage, the lawyers are doing theirs, but it takes an English major to explicate this whole sorry mess.
Andersen's downfall has all the classic elements of a Greek tragedy, except the most important one: catharsis.
A great tragedy entails much more than great suffering. To begin, there must be a larger-than-life protagonist.
Certainly Andersen qualifies as a tragic hero, larger than life in both size and status. A year ago, if anyone had dared predict which Big Five accounting firm might lose its reputation overnight, it wouldn't have been Andersen.
And the hero's misfortune must be caused not by "vice," as Aristotle put it, "but on account of an error."
When one who dares to be great has a fatal flaw, the tragic formula is that it inevitably leads to suffering, brought on by the gods or in fear of the gods.
To suffer due to wrongdoing is justice, not tragedy, and while some at Andersen may fall into that category, the vast majority, especially the first 7,000 who lost their jobs last week, are innocent.
Andersen's tragic mistake wasn't the decision to shred Enron Corp. documents. Every accounting firm shreds documents after every audit. Whether Andersen went too far, too late after Enron had imploded is a legal question, not the root cause of its suffering.
Andersen's fatal flaw was the "original sin" of most Greek tragedies: hubris. An arrogant culture made it possible, even necessary, to accommodate a big client's most outrageous financial schemes, instead of enforcing reasonable accounting standards. A client like that created much risk, those at the top knew, but they felt that Andersen's expertise made it "manageable."
If nothing else, hubris causes the tragic hero to ignore the admonitions of the gods. Andersen acted as if costly settlements over Waste Management Inc., Sunbeam Corp. and numerous other botched audits were not a warning.
There must be a chorus, to comment on the hero's deepening predicament. In this case, that would be Congress, which took Andersen's paper shredding and offered it to the gods of public opinion. These gods were angry about the complex collapse of Enron and they needed a sacrifice.
But when we witness a tragedy, we are supposed to undergo a discharge of our conflicting emotions, to feel some sort of catharsis.
Instead, this feels like watching a car wreck caught on videotape, in slow motion. Our pity and fear, anxiety and indignation remain bottled up with Andersen's fate.
We feel pity in the suspicion that the firm's greatness, and so many innocent careers, have been destroyed by a series of miscalculations, not the impartial dispensation of justice. The fear is that it could happen to any major accounting firm, or any highly visible public company, for that matter.
The real lesson here may be that to disclose possible wrongdoing and cooperate with the government, as Andersen did, is a strategic mistake of the first order.
If so, that truly would be tragic.
©2002 by Crain Communications Inc. |
