Remarks of Joseph F. Berardino
Managing Partner - Chief Executive Officer, Andersen Worldwide
U.S. House of Representatives
Committee on Financial Services
February 5, 2002


"Sixth, Andersen will create a new independent Office of Ethics and Compliance to investigate, on a confidential basis, any concerns of Arthur Andersen partners, employees or individuals from outside the firm relating to issues of audit or auditor quality, integrity, independence and compliance."


Hmmmmmmmm, I guess if they are just now creating an 'Ethics Office' that means they never had one before this? [whacko]

I always thought there was an unholy alliance between the auditing company, the auditing firms consulting subsidiary, and the client. I guess the Enron debacle has really brought this relationship out into the mainstream world of the man on the street.

Ah yes, that will help.  The CPA industry has needed to get yanked up by the short curlies for 20 years.  Remember the savings and loan fiasco of the 80's?  Remember Frank Keating and Lincoln Savings and Loan?  Remember who his CFO was?  Yep, former auditor, from AA as I recall.  CPA's have held themselves out at some kind of sacred priesthood.  Turns out they're just a bunch of money grubbing whores like the rest of us.  Auditing, consulting and cashing multi-million dollar checks?  Nope, no conflict there........

End of rant.  And yes, I'm sure there are a lot of honest hardworking CPA's out there.  Apparently none of them work for AA in Houston...

[red]I should send in my resume!!!!  They must be hiring!!!!!!![/red]

They sure as shit can't be transferring anyone into it internally.

If they need to create an ethics office then it is far to late for it to do any good.

The culture is already tainted and corrupt. Creating some powerless office will do nothing and is probably designed to do nothing other than create a positive public relations spin.

Rusty

Just because in some situations the consulting fees are multiples of the auditing fees, you think the auditors' independence is impaired?

Hah!  I know the industry a bit, and believe me, just the idea of losing the auditing fees is enough to cause either brain freeze or some S.W.A.G. calculations about whether the downside (risk of a blowup and attendant lawsuits) is really big enough to outweigh the billable hours.

Add that to the limited time budget for all the different areas of the audit.  I know of one case where 4 hrs. was allowed to audit "cash" & equivalents for a small public company.

The chances of lower-level staff finding and successfully carrying such an issue (as those funny little partnership investments)to the level where a decision to boot the client might be made, are very small.

As you know, all their assets & liabilities (of the partnerships)do not show up on the balance sheet. The net equity, maybe, on one line.
Used to be, only the initial investment was booked.

Anyway, back to the consulting fees.  Hardly necessary to ruin an audit, but if any extra auditor resistance arises, the consulting arm should be able to spike the problem handily.

What we need is a tell-all book by the archetypical "disgruntled ex-employee".

Anyone ever met a "gruntled" one?