Andersen gets maximum fine over Enron

The US arm of disintegrating firm Andersen has been sentenced to five years of probation and a fine of $500,000 for obstruction of justice related to its work at collapsed energy giant Enron.

Written by AccountancyAge.com

Accountancy Age, 17 Oct 2002

Link: Andersen special report

Link: The Enron saga

The punishment was the maximum allowed under law. Lawyers for the firm have said they will appeal the ruling.

The order against Arthur Andersen LLP handed down by federal prosecutors means the firm faces more fines and extended probation if the firm violates terms handed down by US District Judge Melinda Harmon.

The firm is now just a shell of its former self, with just 1,000 of its original 28,000 staff remaining on the payroll. It has also ceased to perform any audit work in the US, after having its auditing license withdrawn earlier this year. The majority of its global network of firms has been sold off to former Big Five rivals, now known as the Big Four.

Andersen was accused of shredding Enron-related documents last year to thwart a US Securities & Exchange Commission accounting probe. The nail in the coffin for Andersen came in May when former lead auditor, David Duncan, who headed up the Enron audit in Houston, admitted that documents relating to the energy company had been shredded.