In a statement last night the firm said electronic and paper documents and correspondence relating to the Enron engagement had been destroyed by ‘individuals in the firm involved with the Enron engagement’.
Andersen insisted millions of documents related to Enron still existed and said some deleted electronic files had been retrieved.
The admission comes at a bad time for the firm. Some Europe-based senior partners of other large firms have criticised the way CEO Joe Berardino has handled the Enron fallout including his admission that the firm had made errors in its audit of Enron.
The firm has now suspended its current records management policy with immediate effect and instructed all partners and personnel to retain all existing documents until further notice. The firm also has asked a lawyer, former senator John Danforth, to conduct an immediate and comprehensive review of Andersen?s records management policy and to recommend improvements.
‘The firm has assured the SEC, the Justice Department, congressional committees and other agencies that it will continue to cooperate fully with their investigations,’ Andersen said in a statement. ‘After government agencies have had a full opportunity to consider these matters, Danforth also will advise the firm to ensure that all appropriate remedial and disciplinary actions have been taken.’