PracticeAccounting FirmsAndersen complaints in the US add up

Andersen complaints in the US add up

Amid the increasing nervousness of US markets, Andersen's efforts to rebuild its reputation are being undermined by continuous revelations of associations that are publicly embarrassing at best.

The latest includes a lawsuit against audit client Hub Group, a logistics company, that says it must restate its finances. Another potential costly black mark on the accountant’s books is a forthcoming court case related to the Baptist Foundation of Arizona’s bankruptcy in 1999.

Illinois-based Hub Group admitted last week that it will have to restate itsearnings by between $3m and $4m back to 1999 because of ‘accountingirregularities’ in the books of its subsidiary Hub Group DistributionServices.

While the NASDAQ-listed company is still working out the details of thediscrepancies, law firm Milberg Weiss Bershad Hynes & Lerach said yesterdaythat it has filed a class action lawsuit against the logistics company.Arthur Andersen LLP was also named as a defendant.

Meanwhile the Baptist Foundation, which is slated to go to court on 4 March,is hoping to tap its former auditor Andersen for at least $300m incompensation for investors who lost about $590m according to the Wall Street Journal.

Three officials from the non-profit organisation have admitted felonies while another five are up against fraud charges.

Furthermore the Arizona Board of Accountancy wants to put Andersen on probation in the state.

Another high profile Andersen client and bankrupt telco Global Crossing iscurrently being investigated by the SEC because of allegations of improperaccounting.

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