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Andersen will no longer audit public companies

After 89 years in business, Arthur Andersen LLP on Saturday ended its role as auditor of public companies.

The Chicago-based company was convicted in June of obstruction of justice for shredding and doctoring documents related to its audit of Enron, the now-bankrupt energy trader. Afterward, Andersen told the Securities and Exchange Commission it would cease auditing public companies. It already had given up its license to practice in several states.

More than 800 public companies have dropped Andersen as its auditor in the aftermath of accounting scandals at Enron and WorldCom Inc, the second-biggest US long-distance company and a former Andersen client.

"As of this day, Arthur Andersen LLP has voluntarily relinquished, or consented to revocation of, its firm permits in all states where it was licensed to practice public accountancy with state regulators," the company said Saturday in a statement.

The company now has fewer than 3,000 of the roughly 28,000 employees it had before the Enron scandal. Of its more than 1,200 public-company audit clients, none will remain.

The firm's startling decline has come in less than nine months.

"It's like a family member who has terminal cancer," said Gary Brentlinger, human-resources director for Andersen's offices in Houston, Austin, San Antonio and New Orleans. "We're watching the firm die."

Andersen -- once the fifth-largest accounting firm -- is left with the tasks of winding down operations and dealing with lawsuits. The company has been selling off units to raise cash and agreed in May to sell its consulting business to KPMG Consulting Inc for as much as US$284 million.

As people have left and files have gone into storage, Brentlinger said Andersen staff members have removed papers from offices in a downtown Houston skyscraper and turned off the lights, leaving only furniture and artwork. Office supplies were donated to charities.

Andersen has had to disconnect its e-mail system, overhaul its conference-calling operations to take into account offices that closed and sell computers and other hardware.

The once-mighty accounting firm is expected to be sentenced Oct. 17.
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