Texas turns on Andersen
news.bbc.co.uk
Texas turns on Andersen
The authorities in Texas have recommended revoking the operating licence of accountant Arthur Andersen, accusing the firm of violating rules in its dealings with collapsed energy trader Enron.
"Andersen's failure to comply with professional standards was not the result of the actions of one 'rogue' partner or 'out-of-control' office, but resulted from Andersen's organisational structure and corporate climate that created a lack of independence, integrity and objectivity," the Texas State Board of Public Accountancy said.
The Board announced that it was seeking at least $1m (£700,000) in fines from the firm, in what would be by far the biggest enforcement action in its history.
Andersen, which is already facing a federal trial over its auditing of Enron's books, said it was regrettable that the board had rushed to judgment.
Under attack
Andersen has already been accused of destroying documents relating to Enron's accounts, a charge that lies at the heart of the federal prosecution.
Andersen makes no secret of having shredded papers, but claims that it was a normal procedure, not an attempt to cover up fraud.
Without the need to prove criminal liability, the Board has argued that any destruction runs counter to the standards it expects from accounting firms.
The Board is seeking $1,000 from the firm for every perceived violation from accounting rules - a list that it says could well "number into the thousands".
Andersen, meanwhile, is keen to avoid corporate-level responsibility for the Enron collapse, and has aimed to shift blame onto its Houston office, and especially the former Enron lead auditor David Duncan. |
