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Saturday, 15 June, The verdict could be the death knell for the year old company, once one of the world's top five accountants. The firm said destroying documents was routine Andersen has already lost much of its business, and two-thirds of its once 28, strong US workforce. Following the conviction, multi-million dollar lawsuits brought by Enron investors and shareholders demanding compensation are likely to follow, and could bankrupt the firm.
The company called Saturday's verdict "wrong" and is contemplating an appeal, but at the same time did promise to stop auditing publicly traded companies - pre-empting an official ban that now is a near certainty. Enron's collapse last December was partly blamed on questionable accounting that kept hundreds of millions of dollars in debt off its books.
Andersen, which audited Enron's accounts, went on trial in Houston, Texas, after allegations that employees had illegally destroyed thousands of documents and computer records relating to its scandal-hit client, which was based there.
The member jury had heard nearly five weeks of testimony and was in its 72nd hour of deliberation over 10 days when it finally reached the verdict. Andersen's defence lawyer, Rusty Hardin, said the firm was disappointed by the verdict.
He said it would file an appeal but had to wait until after the sentencing date - 11 October - to do so. The trial heard how one Andersen executive said on a training video that if documents were shredded and then the investigators arrived, that would be good.
Judge Melinda Harmon apparently set a legal precedent But Mr Hardin had argued that a number of important documents had survived the shredding, suggesting there was no conspiracy to cover up Andersen's work on Enron's books.
The prosecution's star witness was former Andersen partner David Duncan, who was in charge of the Enron audit team. He admitted obstructing justice in April and told jurors that he had signed an agreement with Andersen to present a united front, claiming that neither had done anything wrong.
He said that he had reneged on the agreement after much "soul searching".
Legal precedent The verdict came after US District Court Judge Melinda Harmon made what is believed to be a landmark legal decision to break a deadlock among the jury. She ruled that jurors could reach a verdict on the company as a whole, even though they failed to agree on the individual responsible for ordering the shredding.
Judge Harmon agonised over the decision for more than a day as she sought to clarify a point of law that mystified even seasoned attorneys and other experts on American jurisprudence.This article examines Arthur Andersen, its role with Enron, and what happened to some of its key players.
The demise of Arthur Andersen and Enron was significant. Thousands of the allegations against Arthur Anderson occurred in Texas and under the jurisdiction of the Texas State Board of Pubic Accountancy.
With significant damage to the. What role did Arthur Andersen play in bringing about the ultimate collapse of Enron? Why did Enron's bandwidth trading business fail? What was the Enron scandal?
How The Arthur Anderson And Enron Fraud Changed Accounting Forever many may not be familiar with the details of Enron case or Arthur Andersen’s role. While Arthur Andersen was not implicated.
Jan 16, · Arthur Andersen fired its partner in charge of auditing the Enron Corporation today, saying he had ordered the destruction of thousands of documents and e-mail messages after learning that the. Initial allegations focused on the role of Arthur Andersen. The company was one of the "Big Five" accounting firms in the United States, and it had served as Enron's auditor for 16 years.
According to court documents, Enron and Arthur Andersen had improperly categorized hundreds of millions of dollars as increases in shareholder equity, thereby.
The Enron scandal, publicized in October , eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world.
In addition to being the largest bankruptcy.