Andersen braced for Enron probe
Andersen is bracing itself for an independent investigation of its audit work at Enron in the wake of the collapse of the US energy trader.
Deloitte Touche Tohmatsu is to probe the work of the audit firm that last year earned $1m a week in audit and consultancy fees from the Houston-based energy company, which filed for Chapter 11 bankruptcy protection last Sunday in the US.
Andersen’s chief, Joe Berardino, said: ‘In light of recent developments, we believe that extending the peer review to include work done in other offices, including Houston, and other procedures that Deloitte & Touche deems appropriate and necessary is the right thing to do.’
At the same time, Andersen’s role will come under the spotlight of a Securities & Exchange Commission investigation into accounting errors at Enron.Andersen denied the investigation would be aimed directly at them, saying the probe would be concentrating on unaudited accounts.
Enron’s admission that it had overstated profits by $586m (£413m) and understated debt by $2.6bn led to the largest corporate collapse in US history.The collapse has left behind an estimated $63bn in liabilities, and it is almost certain creditors will have Andersen in their sights.
PwC was appointed the administrator for the European operations of Enron last week and announced 1,100 Enron workers were to be axed,
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