PracticeAuditThe corridors of power…

The corridors of power...

The charging of Andersen by a US federal grand jury with obstruction of justice will create further deep anxiety at the Department of Trade and Industry.

The fear is that the legal proceedings will uncover more than the British government would wish about what has been described as Labour’s ‘love affair’ with Andersen.

The speed with which events tumbled over one another after the Enron bankruptcy and the shredding by Andersen of tons of documents which the prosecutors believe could have been incriminating, led to equally swift action by Patricia Hewitt, the secretary of state at the DTI.

At the end of last month she set up a review of business practices on financial reporting and auditing after the Enron collapse and the alleged failure of its accountant, Andersen, to raise the alarm over massive financial irregularities.

What will also concern the DTI is the disclosure in the indictment, that attempts were also made in Andersen’s London office to destroy even more Enron-related records soon after the inquiry into the collapse was announced.

But what Conservative politicians regard as Labour’s ‘dubious’ relations with Andersen since 1990 will now also come under the spotlight.

What is known already does not make easy reading.

Andersen spent 13 years in the cold, denied government work, over its role in the auditing of the DeLorean sports car firm. It collapsed in 1981 with the lost of millions of pounds of taxpayers’ money.

However, from 1990, Andersen started to build a relationship with Labour and help the party through its years in opposition.

The Tories suspect there is much embarrassing material still to come to light. And they now believe this indictment will unearth many so far untold facts.That is why the DTI is not relishing the prospect of more revelations.

Chris Moncrieff is a senior political analyst at PA news

Related Articles

PwC replaces EY as Domino's auditor

Audit PwC replaces EY as Domino's auditor

2d Alia Shoaib, Reporter
The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

Audit The ‘uncomfortable truth’ behind FRC’s Big Four fines recommendations

1w Carl Johnson, Stephensons
BDO holds off Big Four to retain top position as AIM auditor

Audit BDO holds off Big Four to retain top position as AIM auditor

1w Alia Shoaib, Reporter
FRC urged to fine Big Four firms penalties over £10m

Audit FRC urged to fine Big Four firms penalties over £10m

3w Alia Shoaib, Reporter
EY to audit Standard Chartered bank

Audit EY to audit Standard Chartered bank

1m Alia Shoaib, Reporter
KPMG replaces PwC as Croda auditor

Accounting Firms KPMG replaces PwC as Croda auditor

2m Emma Smith, Managing Editor
EY fined £1.8m over Tech Data audit

Accounting Standards EY fined £1.8m over Tech Data audit

2m Emma Smith, Managing Editor
Top 50+50: Firms post significant growth in new tax and audit rankings

Audit Top 50+50: Firms post significant growth in new tax and audit rankings

2m Emma Smith, Managing Editor