How long was it between the
Enron blowup and when Arthur
Andersen went out of business?
Typical Response: One to three years.
Fact: The largest accounting firm in the
world was gone in 90 days.
Was the indictment upheld?
Typical Response: Yes, that is why they
went out of business.
Fact: No. The Supreme Court overruled
the lower court in a 9-0 decision, and came
to the conclusion within weeks, making it
one of their quickest decisions ever.
How many people lost their
jobs as a result of the false
Typical Response: Have no idea, but the
partners got what they deserved.
Fact: Eighty-five thousand people lost
their jobs and only a few thousand were
partners. Most were staff people and clericals who made modest sums of money.
Who benefited from Arthur
Andersen going out of business?
Typical Response: Everyone — we finally
got rid of those crooks and made a statement to the rest of business to operate
Facts: It was not the Arthur Andersen
people; they lost their jobs. It was not the
clients; they had to go through the stress
and expense of finding a new auditing
firm. It was not the business world in
general: It now has fewer firms from
which to choose and rates increased.
It was their competitors who benefited
— they got Andersen’s best people and
clients and were able to increase their
rates and profitability.
What accounting firms now
have ex Arthur Andersen
partners playing leadership
roles in their firms?
Typical Response: None
Facts: The “big four,” all the large middle-tier firms and many small firms have former Arthur Andersen partners in leadership positions. Finally, many members
of the new Public Accounting oversight
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Board (PCAOB), which oversees these
firms, now have former Arthur Andersen
people involved in reviewing the quality
of these firms.
Larry Katzen, author of “And You Thought
Accountants were Boring — My Life Inside
Arthur Andersen,” ( LarryRKatzen.com),
worked at Arthur Andersen from 1967
to 2002, quickly rising through the ranks
to become a partner at age 30. His new
memoir details the government’s unjust
persecution of a company known for
maintaining the highest standards.