Posted on 09/02/2002 6:26:05 AM PDT by Libloather
It's only the lawyers left at Andersen
Monday September 2, 2:45 am ET
By Adrian Michaels in New York
FT.com
As usual, the last people on the payroll are the lawyers.
At the beginning of the year Andersen, once the proudest name in the accountancy profession, employed 85,000 people worldwide and boasted annual revenues of $9.3bn. But almost every country practice outside the US has gone to a rival. The US's 26,000 staff have meanwhile been wooed piecemeal, office by office and department by department.
The firm, now an infamous casualty of the Enron scandal, says there are fewer than 3,000 people remaining. It gives no detail of what they are doing.
People close to the firm say there are some information technology staff, a few people at training facilities, some internal finance personnel. And there are a host of lawyers, grappling with the Enron fall-out - piles of lawsuits from disgruntled shareholders and employees in companies whose books once bore the coveted Andersen imprimatur. It is an ugly, squabbling, final act in a stunningly swift demise. One activity that is not taking place at headquarters in Chicago, or any of the handful of offices elsewhere, is auditing.
Andersen, formerly called Arthur Andersen after the man who founded the firm in 1913, ceases audits in the US today.
In March last year the firm dropped "Arthur" from its name. Joseph Berardino, who was chief executive at the time and resigned dramatically a year later, said: "There is extraordinary power in our name because it stands for time-tested values, a unique one-firm global operating approach and recognised superior performance."
It still has extraordinary power. As Enron's auditor, Andersen was immediately swept up in the controversy surrounding the energy trader's complicated accounting practices. Andersen stood accused of playing a key role in helping hide the true financial state of the company from investors.
The Department of Justice, incensed by the admission at the start of the year that its Houston staff had shredded thousands of documents as investigators closed in, went after Andersen. It stood trial for obstruction of justice. Two months ago, it was found guilty and said it would begin giving up its audit licences state by state.
The firm's 2,500 public audit clients are switching. Some, such as WorldCom and Qwest Communications, have revealed significant problems of their own. Andersen's main rivals - PwC, KPMG, Ernst & Young and Deloitte Touche Tohmatsu - have been picking up business and personnel.
Deloitte will not say how many, but industry analysts estimate that about 3,000 Andersen staff, including most of the tax practice, have moved over. KPMG and E&Y have each picked up 2,000-2,500 people while PwC has taken in about 600. Andersen's consultants have gone to KPMG Consulting. Smaller rivals, such as Robert Half and Grant Thornton, have struck deals.
Andersen has been insisting it is not about to file for bankruptcy. Because a bankruptcy filing alters the dynamics of any lawsuit, analysts say the firm has to leave its options open. It could keep the lawyers in work for years to come.
...and the ability to shred enormous amounts of documents at a moments notice.
...with signs that read 'How dumb is to dumb?' and 'W: resignate now!'
Protest rule #122 - If you're gonna accuse someone of being stupid, be sure to correct any spelling errors on all protest signs...
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