"Those books were not cooked in February or in August. There were questions about the viability of some of the assets. And those were reflected in the accounts when the facts became known," Berardino said.
Enron fired Andersen as its accountant last week.
Meanwhile, Andersen fired its lead partner on Enron, David Duncan, after the Big Five accounting firm confirmed he ordered the destruction of Enron-related documents despite an SEC request for the files. "Frankly, we're very concerned about those activities," Berardino said. "At the least, in our opinion, [Duncan] displayed extremely poor judgment in his destruction of documents."
He also defended Andersen against an assertion that the firm may have overlooked issues involving potential conflicts of interest and the off-balance-sheet financings because Enron represented US$100 million a year in consulting fees.
"That's a lot of money, we understand that. But we're also a US$10 billion organization. This client was a fraction of 1 percent of our fees," Berardino said.
"Everybody wants to talk about the off-balance-sheet liabilities. But those liabilities also were countered by off-balance-sheet assets. The key here is that those assets lost value very quickly," he said. "The work we had done for Enron, under any scenario, were appropriate and were disclosed to the board and to the shareholders."
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