Ten years ago, Arthur Andersen was forced to surrender its licences in the United States after the Enron scandal, precipitating its global collapse. December 2011 marked 10 years since Enron, the Texas energy company, filed for bankruptcy after perpetrating one of the world's biggest business frauds. More significantly for the accounting profession, May 2012 marks a decade since the Enron indictment in the United States, and the beginning of the end for the well-respected Arthur Andersen, one of what was then the Big Five accounting firms.
The firm was convicted of obstructing justice by destroying thousands of documents related to its work for Enron. While the ruling was overturned in 2005 on technical grounds, it came too late to resuscitate the brand. For the profession, the scandal drew wide scrutiny on the supposed compromised position of large firms that audit the books of clients to whom they also provide consultancy services.
For a look back on the past decade of reactions, reforms and soul-searching in the accounting profession, read the article “ANDERSEN, AUDITING AND ATONEMENT: The accounting profession 10 years after Enron” by George W. Russell at GAA Accounting online.
