Andersen: For lots of good people, too little, too late.

I disagree. Kill the firm. The company is the entity that did wrong. As it is, there is very little accountability when it comes to white collar crime. Punishments are weak. With a potential death penalty, there is a strong incentive for those truly responsible (the board and the shareholders) to really take a close look and make sure everything is on the up-and-up. The workers will recover.

 

And your opinion would be the same if someone at your job (I'm not sure what you do) did something wrong, that you had nothing to do with? You would be fine losing your job in that sutuation...since you feel it is right to punish everyone?

 

I think I'm more turned the punish the firm camp. Its one thing if underlings did something illegal or ethically questionable without the knowledge of management its another when its company policy. As a corporate officer or firm partner their behavior reflects on the whole firm otherwise it would be easy for businesses to escape responsibility by scapegoating a few officers. IE a board could tactily go along with an illegal scheme run by a few officers and even benefit from it and then leave those officers out to dry while escaping responsibility.

 

Now that I can agree with kinda....

 

I'm a financial analyst. And, yes I would be fine with that. It would probably suck being unemployed with a young child and a mortgage. But, if my company was defrauding the public, I'd want it to die. I wouldn't be punished, I'd just be layed off -- which happens to plenty of people with even less justification than that. Hell, I almost got layed off last November because the owner felt payroll was bloated. I'd find a new job.

 

The Andersen folks clearly knew that a lawsuit was on the way when they started the shredding. Its all in that "Smartest Guys in the Room" book that they just turned into a movie.

 

Icehouse,

a COUPLE?

ONE account?

LMAO! I won't even waste anymore time with this if you honestly believe that one or two peeps were responsible for all the wrongdoing, and that the wrongdoing didn't extend into other accounts...

Blind corporate loyalty, amazing...

 

Bendini, Lambert, and Locke are hiring. No worries.

 

Maybe if they'd gone to the SEC when Enron started cooking the books people would acknowledge it.

Or maybe if people didn't think Arthur Andersen wasn't complicit with Enron in this scheme and merely went to the SEC to throw Enron under the bus.

Or maybe if at the same time they went to the SEC they weren't throwing file-shredding parties.

I don't know what company you work with, but I doubt their standard operating procedure is to shred documents just ahead of an investigation by the SEC into possible wrongdoing.

 

Yes, a couple. One major account which got the firm in trouble (Enron). Even if hundreds in the Houston office were guilty, that still is a small % of the thousands of employees worldwide who didn't do jack.

 

If we hold the investment banks to the standard some of you are expecting of Andersen, there'd be no more Merryl Lynch, Citigroup, JP Morgan. I'll bet they smiled when they agreed to their billion dollar settlement.

 

ONE account?

I just listed 5-10 HUGE accounting fraud stories from 2001-2002, all of which were clients of Andersen (most of which they were chief auditors for). At least 2 of which resulted in what was at the time the largest corporate bankruptcies in history (Worldcom and Enron).

 

If we held investment banks to the same standards we held Andersen, then they would be called accounting firms and not investment banks.

 

With Sarbanes-Oxley act, auditors are in high demand. Most ex-andersen people won't have any problem landing a job.

Oh yeah, HUGH difference between accounting firms and I-Banks.

 

Yes, a couple of individuals and one account killed the firm. The firm would still be open in any of the other cases that you listed (i.e. Worldcom), just like EY, KMPG and Deloitte are still open even though they have similar lawsuits.

There is a big difference between botching an audit and conspiring to commit fraud. Seems like you are classifying them all in the same boat.

 

True, but all of the partners were screwed. Yes, that is a risk that you take in a partnership, but still....without that ruling things would have been different....

 

All the Big 5 (or former Big 5 now) were crooks. They all sold their tax schemes and then had their own folks during th eaudit and signing off on the schemes.

Now I'm not saying Sabones/Oxley fixed everything but simply the fact that the same firm who devises a questionable tax avoidance/deferral is the same firm who assures everyone it's ok to do is wrong.

Some firm needed to take the firm to set the industry right and it was Anderson. Sorry for their past employees but I feel much worse for the employees of firms who lost their pensions due to those guys being too "cozy" with their clients.

 

I think Andersen was MADE and EXAMPLE OF . . . .

Just following orders is not a defense
Corporation get alot of rights beyond what mere humans get
they should be held to the same standards
if they are to be CONSIDERED a 'ENTITY'
We don't cut off the KILLING or STEALING HAND
we put the WHOLE PERSON IN JAIL

As someone stated
IF Andersen was allow to just drop a few higher ups
[with GOLDEN PARACHUTES]
A few more companies would just have some
yes men FALL ON THE KNIFE
in times of emergency
and keep on with the business of white collar crime
until caught again

I mean look at Enron . .the business it out
but all the higher up seem to still be doing ok
Mainly KEN LAY . . . he had some henchmen
underneath him FALL ON THE KNIFE
and
he still out and about and I seriously
doubt he spend a MINUTE in Jail

Rocket River

 

Well...let's see how the industry was set 'right.'

Big 5 became Big 4 -- less competition -- yippee

Sarbanes-Oxley etc created a whole bunch more work for those remaining accountants. Billable work!

Additional regulatory hoops squeezed the smaller firms out of the public company audit business. Big 4 are OK with that.

Audits gained profile. Firms collectively chose not to compete on price. Take-it-or-leave-it pricing now! (anybody paid an audit bill lately? Notice an increase in price?).

With the exception of the newer partners (some of whom were seriously wiped out financially), and the non-professional staff (secretaries, IT guys, etc) the remaining accountants went to work at the remaining firms. The work didn't go away. Accountant salaries have never been higher. And the firms have never been more profitable!

And Andersens actions?

Never really scrutinized. No conclusions needed whether it was fraud, incompetence, collusion, or judgment. No need. They were put out of business for the shredding. And would the shredded documents have contained info about a significant fraud? Possibly. But doubtful. The shredding they got busted for was file 'clean-up' according to policy, which should have been done before. The juicy stuff (fraud evidence, deliberate misstatements) would not have been accessible to the junior staff that did the shredding.

But a quick resolution.

No need to look at the Investment Banks. Better get back to business -- BUY THOSE STOCKS!!! Don't worry that the advisors told you to ignore earnings. That they were explicitly on the take.

So Andersen was the scapegoat. A deserving one, IMO, and should likely have been subject to the biggest fine eva'. Serious coin indeed. Make it hurt. And WHY did it seem it was always Andersen messing up? But putting them out of business was really more about 'doing something NOW' then really addressing the problems, IMO.

On the other hand. Most Andersen people I've met have been weenies. So I wasn't totally bothered by their demise .