Fraud

Report: Enron Withheld Info for Four Years

New story in Los Angeles Times alleges that Andersen knew nothing about one of Enron's limited partnerships.
CFO.com StaffFebruary 7, 2002

In a blockbuster story, the Los Angeles Times claims that Enron executives withheld critical financial documents from auditor Andersen for four years. The withholding of information allegedly led the auditor into approving inaccurate financial reports, according to the story, which is based on an internal Andersen memo.

When the Andersen auditors came across the documents, they told managers at the energy company they needed to restate earnings from 1997 to 2001, according to the story. On Nov. 8 the company’s restatement cut reported earnings by more than $500 million.

Even so, the story alleges that Enron attorneys tried to convince Andersen the restatements weren’t necessary.

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The internal memo was written on Nov. 2 by Thomas H. Bauer, an Andersen auditor who worked on the Enron account, according to the account in The Times.

The memo is “just another chunk of evidence that demonstrates Enron withheld critical information from Andersen regarding Chewco [one of the questionable Enron partnerships],” Patrick Dorton, a spokesman for Andersen, told the paper.