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High Court Will Hear Andersen Appeal

High Court Will Hear Andersen Appeal

by Rick Turoczy on January 8, 2005

The U.S. Supreme Court yesterday agreed to consider Arthur Andersen LLP’s appeal of the obstruction of justice conviction that pushed the venerable accounting firm into collapse. The 2002 conviction for tampering with documents related to client Enron Corp. injected powerful momentum into the federal government’s effort to crack down on fraud at companies engaged in accounting abuses in the late 1990s. It also sent Andersen into a tailspin from which the company never recovered, eliminating the jobs of more than 28,000 U.S. employees, disbanding an 89-year-old business that reviewed the books of 1,300 public companies, and sharply narrowing the options of clients in the market for accounting firms large enough to perform international audits.

Bringing criminal charges against Andersen was controversial for prosecutors, as employees clad in orange T-shirts marched on Capitol Hill in protest and lawmakers such as House Financial Services Committee Chairman Michael G. Oxley (R-Ohio) declared it was a mistake for the government to indict the entire company rather than a few culpable individuals. Later, outside authorities such as the General Accounting Office (now known as the Government Accountability Office) issued reports warning of anti-competitive consequences in the audit industry after one of the nation’s five biggest accounting firms got put out of business.

High Court Will Hear Andersen Appeal

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