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Arthur Andersen brand revived by tax firm

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4th Sep 2014
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Former partners at Arthur Andersen have bought rights to the name of the former “Big Five” accounting firm 12 years after it collapsed due to its role in the Enron corporate scandal.

The partners will rename their US tax consultancy consultancy WTAS as "Andersen Tax”.

Arthur Andersen shredded Enron audit documents during investigation into the US energy company, which lied about its profits.

Andersen was found guilty of obstructing justice, which shredded its reputation and led to the end of its audit activities.

WTAS, which was set up in 2002 by more than 20 partners, is now one of America's biggest tax firms. It does not do any audit work.

Its chief executive, Mark Vorsatz, said that Andersen had an excellent reputation before Enron.

"Many individuals and organisations were deeply affected by what happened at Enron. But Arthur Andersen, at its best, was a firm that was founded and managed on the basis of quality and objectivity by world-class people with world-class training.”

"As a former partner at Arthur Andersen, it was devastating to see nearly 100,000 professionals—people who started each day with Clients First as their top priority—lose their jobs.

"For Andersen Tax, independence and objectivity are critical. To be clear, we are not an audit firm and have no intention of providing audit services."

Andersen's collapse precipitated fevered bargaining and negotiations as partners and practices including in the UK looked for homes and competitors attempted to mop up the spoils. In the UK, the events provided rich pickings.

There were initial rumours that KPMG would in effect acquire the firm. In the end it was Deloitte which picked up the lion's share of the practice, hiring 3500 Andersen accountants in one fell swoop on April 10 2002, officially integrating them into the practice August 1 the same year. Ernst & Young successfully acquired a significant slice of the firm's restructuring team.

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By User deleted
06th Sep 2014 11:59

Really? ….

‘..The Justice Department's decision to charge Arthur Andersen was based at the time on the determination that the substantial destruction of documents in anticipation of an investigation ..’

Subsequently, as the Securities and Exchange Commission (search) began looking into Enron's convoluted finances, Andersen put in practice a policy calling for destroying unneeded documentation.

Government attorneys argued that Andersen should be held responsible for instructing its employees to "undertake an unprecedented campaign of document destruction."

The Supreme Court (search) overturned the conviction of Arthur Andersen for destroying Enron Corp.- related documents before the energy giant's collapse

Giving his opinion, Rehnquist noted that jurors were instructed to convict Andersen if the accounting firm had an "improper purpose," such as an intent to impede or subvert fact-finding in an "official proceeding." He noted jurors were instructed to convict, even if Andersen mistakenly thought it was acting legally

Therefore, guilt or innocence is overshadowed by process (incorrect jury instruction) and not whether Andersen was guilty or not – seems like a get out of jail card

Always understood that ignorance is no excuse – in any event how can wholesale destruction of financial documents prior to a SEC enquiry into a company’s finances be remotely thought of as acting legally?

…. and now an ex-partner of Andersen’s at the time of problem wants to resurrect the Andersen name !

Whilst accounting firms of this size are probably not subject to rules like everyone else but what happened to 'joint & several'?

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By GuestXXX
17th Mar 2015 17:22

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