BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Tuesday, 19 June, 2001, 19:44 GMT 20:44 UK
Top accountant fined $7m
One of the world's top five accountants has been fined for allegedly fiddling the books of a US firm.

Arthur Andersen has agreed to pay $7m to settle federal charges, in the largest-ever civil penalty against a Big five accounting firm.


Arthur Andersen failed to stand up to company management and betrayed their allegiance to the investing public

Richard Walker
US Watchdog
The US Securities and Exchange Commission alleged that the accountants had filed false and misleading audits of the US firm Waste Management, North America's biggest rubbish-hauler.

Without admitting or denying the allegations, Arthur Andersen has also agreed to an injunction that means it will face stiffer sanctions for future violations.

This is the SEC's first fraud case against a big five accounting firm.

Bad for PR

The firm is hoping that the payout will finally sweep the embarrassing episode under the carpet.

"This settlement allows the firm and its partners to close a very difficult chapter and move on," said the accountants in a statement.

"The allegations underlying the settlement are limited to one client and reflect work that is in some cases more than seven years old," it added.

The four audit partners involved are barred from doing accounting work for public companies between one to five years.

Investor protection

Arthur Andersen was in charge of Waste Management's books from 1992 to 1996 and issued audit reports that are alleged to have overstated revenue by more than $1bn.

Publicly traded companies are required to hire an accounting firm to go through their books using accepted accounting principles.

This ensures that potential investors are not misled by false accounts when considering whether to buy stocks and shares.

The SEC said that Arthur Andersen and its partners had betrayed their allegiance to shareholders and the general public.

"We will not shy away from pursuing accounting firms when they fail to live up to their responsibilities to ensure the integrity of the financial reporting process," warned Richard Walker, head of the SEC.

See also:

19 Apr 01 | Business
29 May 01 | Business
30 Mar 01 | Business
07 Jun 01 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes