Rice had been headhunted back into the Andersen partnership a few years before it collapsed around his ears, taking his investment with it. His capital in the business still hasn’t been repaid in full.
His financial loss could explain the traces of anger that remain in his voice two years after the affair, although any bitterness is mostly, he explains, the residue of what he saw as a breakdown in communication at a crucial time within the firm.
‘I developed a great cynicism about the messages from management. They weren’t giving us the full information. There was no clear communication within the firm to tell us how quickly it could break up,’ he says.
‘I wondered if we would be pursued by Enron creditors. I don’t think they understood the strength of feeling at the SEC and US Justice Office. We needed to know, so I don’t accept they had to keep things quiet due to confidentiality,’ adds Rice.
He also believes that David Duncan, the Enron lead audit partner, was the perfect scapegoat.
‘I met David Duncan in October 2001 in New Orleans. He seemed a perfectly normal audit partner who got himself in a position. I can’t believe that what he was doing, he was doing without the knowledge of the management team in Texas,’ says Rice. ‘He was a convenient person.’
The only way he believes the affair affected his life, however, is in the financial sense. ‘It hasn’t really had an impact on me. It hasn’t had a negative impact on my career, apart from the financial side.’
On the contrary he says, in hindsight the experience could have given him an edge in the job market. ‘It’s left me with experiences of working in the profession that few others go through,’ says Rice.
He has been successfully running the financial services practice at Ernst & Young in Scotland since he turned his back on Andersen. There were big cultural differences between the two firms but he says his move was eased by the fact that his team at Andersen went with him. He also feels more comfortable with the LLP status that the partnership enjoys.
‘Andersen was a corporation masquerading as a partnership. E&Y is a partnership. It’s more collegiate and partners are more supportive. It’s also less arrogant, more diverse and tolerant of diversity,’ explains Rice.
Despite his resentment at management, he was very sad to see the firm collapse. ‘It was quite harrowing,’ says Rice. ‘It was heart wrenching to see some of the email traffic. The idea that Andersen would become the butt of jokes on the Letterman Show was quite amazing for a proud and arrogant firm.’
Personally he has learnt the value of prudence and is much more focused on risk than ever. He has ‘no doubt that corporate scandals could happen again’, But he’s unsure whether an auditor ‘could be so directly implicated again’ due to the regulatory changes.
‘Reputation is everything. Perception is more important than facts often. It’s up to the profession to restore that confidence now,’ he adds.
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
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