PracticeAuditAndersen admits Enron error

Andersen admits Enron error

Andersen boss Joe Berardino has admitted the firm got it wrong over the audit of Enron, the US energy company that collapsed last month.

Speaking at the first congressional hearing on the collapse, Berardino told the House financial services committee that Andersen had warned Enron executives of possible illegal actions.

Referring to the firm’s treatment of one of Enron’s special purpose entities, an off-balance sheet vehicle, Berardino said: ‘We made a judgement about the appropriate accounting treatment that turned out to be wrong.’

But he said Enron had withheld information and that Andersen had told the energy giant of possible illegal acts, according to today’s Financial Times.

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