The week began with those still left at defunct firm Andersen wishing they had not got out of bed; as the week progressed there was also bad news for Xerox, more embarrassment for the Revenue, harsh words from Howard Davies and a guilty plea from a former WorldCom executive.
On Monday, Peregrine, the US software infrastructure developer, announced it planned to sue former auditor Andersen for $1bn (£643m) at the same time as filing for Chapter 11 bankrupty protection. Andersen responded by calling the charges ‘outrageous’.
The Revenue causes a stir when it admitted it was selling its estate of more than 600 buildings to a company based in a tax haven, and then wrongly announcing the buyer as a UK firm,
And it emerged that shareholders of Railtrack Group, the parent company of the derailed infrastructure business, would be asked to appoint Deloitte & Touche as liquidator at a special meeting next month.
Tuesday was not a good day for Xerox – reports suggested the embattled office equipment giant could face criminal charges following a second investigation of its accounting practices, this time by the US attorney’s office.
At the Auditing Practices Board, the hunt began for a new chairman after Ian Plaistowe, announced his plans to step down on 31 December 2002.
On Wednesday Watford FC took the unprecedented step of asking its players and some senior staff to take a 12% pay cut to help keep the club from sliding into administration due to debt problems.
Thursday’s big story was the confession by auditors that their impartiality can be compromised by the ‘desire’ to win more lucrative non-audit business from their clients, according to a study by the Accountancy Foundation’s Review Board.
Equally damning were the comments of FSA chairman Howard Davies who said he could not see the world surviving with only four big accounting firms.
The week ended with the first admission of guilt entered by a WorldCom executive, as David Myers, former senior vice president and controller at the collapsed telecom pled guilty to fraud in relation to the accounting scandal that brought the company to its knees.