PracticeAuditFirms told ‘beware’ after Enron

Firms told 'beware' after Enron

Interrogators of Andersen auditors in the US over the collapse of US energy Enron warned other firms to beware yesterday.

Along with ex-Enron auditor David Duncan, who refused to testify, four Andersen officials were yesterday hauled before the House Oversight and Investigations subcommittee.

In response to a heavy barrage of questions Andersen’s global managing partner CE Andrews repeated statements that basically shove all the blame for document shredding towards Duncan.

The firm’s legal counsel Nancy Temple insisted she did not know about the shredding of the documents but her answers to many tough questions were preceded by a less than inspiring: ‘I do not recall’.

During the four hour hearing Republican Representative Billy Tauzin asked why nobody reminded Duncan to preserve documents before November 10.

Andrews answered: ‘The policy is that the responsibility is with the engagement partner. (..) We are revising that policy.’

An outraged Tauzin issued a warning to the Andersen employees in the room and to all accountancy firms saying: ‘everybody better listen to this.’

He went on to say that ‘if all policies say the accountant is responsible [for document destruction and retention decisions] and not the legal department’ there will be trouble.

‘I’m not defending the policy,’ Andrews insisted.

At press time other Big Five accountancy firms had not responded to our questions about how their policies compare to Andersen’s.

At a hearing in the Senate yesterday former SEC chief Arthur Levitt called for rules preventing the purchase of audit and consultancy services from the same firm.

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