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View Diary: Thoughts on the Enron decision from an ex-Andersen guy (240 comments)

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  •  A question: were you unaware of (5+ / 0-)

    your company's complicity in the Enron audits?  Arthur Andersen was involved in the cover-up.  That was proved without a doubt.  

    Your quote,

    "There were schemes that were hidden from Andersen.  But of course, Andersen does deserve a share of the blame."

    I'm sure that Enron hid lots of corrupt practices, in particular the derivatives and the switching of liabilities to assets.  

    But in general, when an independent auditor signs off on the financial statements, they are staking their reputation on the fact that these financials are in order.  If they had any doubts or reservations, the auditors should not have signed off on them.

    That's the reason why they have independent auditors review records of publicly traded companies.  The public needs someone they can trust when the think about buying shares of that company.

    This was not the first time Arthur Andersen signed off on questionable accounting practices. It wasn't just Enron, it was others.

    As an accountant, you can pretty much tell when you're dealing with a corrupt company.  Oh sure, some of it is mistakes, like they use the wrong depreciation for capital assets and so on.  There is a reasonable room for errors.

    BUT when the same auditors keep coming back, year after year to audit the company which they no doubt KNEW was corrupt, then it's their own fault.  Andersen didn't need Enron.  They had lots of other good accounts.  They just went back to the trough because it was juicy, and you know it.

    Accountants know intimately the inner workings of a company.  They can smell a rat after a while; they're no dummies.  I'm an accountant, so I know of what I speak.

    You're right: Enron was the crook.  But Anderson WAS THE ENABLER who let it happen.

     

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