| Topic Name: |
Andersen & Enron |
| Message Name: |
A few extra thoughts.. |
| Date Posted: |
03/15/2002 |
| In Reply To: |
I am also an ex-andersen when it was the Big Eight, then the Big six... and I want to say clearly that Andersen is more to blame than Enron.
Andersen along with all public accounting firms in the US came about because of the Enron's of the 1920's. The firm was among a few that agreed to be PUBLIC accounting firms trusted with auditing the books of corporations so that the public could have confidence in the reports. WE ALL KNOW THIS. It is Auditing 101, but Andersen's greed let them look the other way when partners were dancing too closely with their clients.
The statement that "There is no way any Big 5 firm would flagrantly violate the law." used to be idealistic. Beging this week it once again true. I look on with great admiration of those bringing the criminal charges. It is criminal.
Those that worked there and have their CPA might be smart to go back and get an MBA because they will not be CPA's soon.
I don't feel sorry for the managers and above in this case. They all should have "blown the whistle," but they did not. They analysts (if that is what they are still called) should not be to blame, but they need to learn from this and take their knowledge on to what ever Big 4 firm they work for in the future.
I also feel this is why Price backed out of the merger talks with Andersen in the 90's.
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| Message: |
I would like to make a few things clear. I feel terrible for employees and investors who lost so much with the fall of Enron. I doubt you will find a single Andersen employee that doesn't feel this same way. But, I just wish more people would take the time to understand what really caused the demise of Enron. Although the restatement of their financials clearly worsened Enron's financial position, Enron was already falling and it had nothing to do with Andersen.
Essentially, Enron's top management made a strategic, yet risky, decision to move out of the energy business and into a form of gambling. They decided to continue pursuing risky investments which began to fall apart one after another.
As those in the accounting industry know, the disclosure rules around many of these types of investments are not the clearest in the industry. Especially if top management of Enron was not completely open about the investments. Maybe greed led the Andersen Houston partners to delay the restatement as you mentioned, or maybe it didn't. Maybe top management just did a great job of hiding the investments. That I truly don't know the answer to. What I do know is that the financial results were terrible because of overly risky decisions made by Enron's top management. The restatement itself, relative to the size of Enron, was not large.
But, I understand that the politicians, the Justice Dept, Enron's attorneys and the investment bankers needed someone to blame. It's just extremely unfortunate that so many amazing Andersen employees all over the world are being mentally and physically crushed by a possible error in judgement from a couple employees and a Justice Department with an ego. Congress won't say a word as they know how much Enron financed their campaigns. Enron's attorneys play dumb and blame Andersen because it's the easy way out. Andersen is the only one that stepped up and admitted some things may not be right.
But, what's done is done, and maybe Andersen doesn't survive. But, I will always know that I worked for an amazing firm with the most caring people I have ever met.
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