PracticeAuditAndersen awaits decision on New York work

Andersen awaits decision on New York work

Andersen's kudos came under more pressure yesterday as NYC hauled the firm in for a review, as another bankrupt audit client, Global Crossing, defended its accounting methods.

New York City’s comptroller William Thompson summoned Andersen to meet his staff yesterday afternoon to evaluate if he should strike the firm off an approved accountant list followed by city agencies. Thompson described the meeting as ‘productive’ but has not made a decision.

Andersen would not directly lose revenue as a result, but an adverse decision would not be a popularity booster. The Bush administration is already reviewing the firm’s status at its agencies. Companies are less ready to comment on their views about the auditor.

However, bankrupt client Global Crossing yesterday dismissed allegations of -inflated revenue’ and ‘intentionally misleading accounting’ made by an ex-employee Roy Olofson last year. It said Olofson, threatened to file a lawsuit unless the company gave him a pay-off.

Joe Perrone, the operator’s executive VP of finance conceded Global Crossing’s financial reporting was ‘not black and white’ to investors but he insisted that it is ‘in accordance with generally accepted accounting practices’.

He credited the allegations to a ‘lack of understanding’ of an accounting change last year that brought GAAP revenue to ‘negligible” levels’. The SEC, Andersen and Global Crossing gave the change a lot of attention last year, Perrone added.

Andersen’s Berardino has had letters defending the firm printed in the Wall Street Journal, New York Times and Washington Post.

Related Articles

Is predictive analytics the end of the annual audit?

Audit Is predictive analytics the end of the annual audit?

4h Martin Herron, MHA MacIntyre Hudson
Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

5d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

1w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter