PracticeAuditAndersen denies Enron blame

Andersen denies Enron blame

Andersen this week revealed the Securities and Exchange Commission is investigating the finances of its audit client Enron over accounting mistakes made by the US energy company.

The Big Five firm said it was not the focus of any investigation by the regulator, but added Enron had set up an internal ‘special committee’ to get to the heart of the issue.

US Andersen partner, David Tabolt, said: ‘There have been several mistakes made by the company during unaudited periods which have been acknowledged by Enron. We have helped the SEC with the enquiries but they are not aimed at us.’

Enron has been asked to provide additional information regarding a number of off-balance sheet transactions in which the company was involved.

It has subsequently been asked to provide the SEC with a restatement of prior financial statements to reflect a previously announced Pounds 900m reduction in shareholders’ equity.

A restatement of financial statements for 1997 through to the first two quarters of 2001 have also been submitted.

‘We believe that the information we have made available addresses a number of the concerns that have been raised,’ said Ken Lay, Enron chairman and CEO. ‘We will continue our efforts to respond to investor requests for information about our operational and financial condition so they can evaluate, appreciate and appropriately value the strength of our core businesses.’

Meanwhile, it has been suggested that the SEC’s revamped auditor independence rules may be tested after Enron paid Andersen Pounds 18m for audit and Pounds 20m for non-audit services last year.

Links

Andersen approves Enron accounts plan

Enron’s SEC filing

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