Andersen’s fairy tales

A $7m fine from the SEC again raises doubts about the independence of auditors

Jun 21st 2001|

THIS week the Securities and Exchange Commission (SEC) brought its first successful action for fraud against an auditor in more than 20 years. It fined Andersen (né Arthur Andersen) $7m for “improper professional conduct” when auditing the accounts of Waste Management in the early 1990s. The rubbish collector's unqualified accounts for the years 1992-96 were subsequently found to have overstated pre-tax income by more than $1.4 billion. Without admitting or denying the allegations, Andersen has agreed to pay what is the biggest-ever penalty imposed by the SEC on a leading firm of accountants.

This article appeared in the Finance & economics section of the print edition under the headline “Andersen’s fairy tales”