Andersen and the Enron saga
Big Five firm Andersen is walking unsteadily on the biggest corporate tightrope of its life, following the collapse of its audit client Enron, once America's biggest energy company.
Not only has Joe Berardino, Andersen’s chief executive, publicly admitted it made errors in its audit of Enron, but the firm recently told a US Justice Department hearing something potentially far more damning; namely that it disposed of ‘a significant but undetermined number of Enron-related documents’.
The implications for Andersen are enormous, with some experts speculating that a massive lawsuit could bring about the downfall of the firm, as Enron investors bay for blood.
Whatever the outcome for the firm, the repercussions for the other Big Five and the audit profession in general will undoubtedly be far-reaching.
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