Black hole missed in NASA accounts
Andersen is facing another row over its audit work in the US, this time for failing to spot a £644m (£460m) error in the accounts of NASA, the US space agency.
A report by America’s General Accounting Office found the firm had fallen short of expected professional standards in its review of NASA’s 1999 accounts.
NASA had said it had $686m left over from contracts in the previous year, whereas the true amount was $42m, a discrepancy Andersen failed to pick up.
The GAO report said: ‘Andersen’s audit was characterised by excessive reliance on representation by NASA management, which led to an inappropriate assessment of risk related to the budgetary statements and resulted in the absence of any independent valuation of underlying data.’
Andersen blamed the discrepancy on a ‘good faith misinterpretation’ of the guide lines and said it raised no inference of a lack of professional care.