Lawyers line up Andersen jury

The Andersen trial has moved a step closer, as lawyers on Monday began selecting a jury to decide the disgraced auditor's fate.

The jury selection process marks the final stage of preparation for the trial.

Barring a last-minute deal, Andersen will on Tuesday appear in a Houston court charged with obstructing justice during an official investigation into the accounts of bankrupt energy firm Enron.

A guilty verdict could finish off the embattled audit company, which has lost hundreds of clients worth about $1bn in annual revenues since the crisis began.

Shredded evidence

The charges against Andersen stem from its admission late last year that some of its executives shredded documents relating to Enron, one of its most high-profile audit clients.

Some of the documents were destroyed after US stock market regulators had opened an inquiry into Enron's accounts.

Andersen is expected to argue in court that the executives responsible for shredding the documents did so of their own accord, without the knowledge of top-level management.

But the prosecution, which has persuaded the Andersen executive in charge of the Enron account to give evidence on its behalf, is thought to have a strong case.

The trial is expected to last three weeks.

Fallen giant

Houston-based Enron, one of the most dazzling corporate success stories of the 1990s, filed for bankruptcy in December after it emerged that the firm had hidden millions of dollars in debt using a series of complex external partnerships.

Andersen's failure to spot irregularities in Enron's books severely damaged its reputation, and triggered a crisis of confidence in the audit industry.

Investors expressed concerns that auditors may turn a blind eye to accounting glitches in order to secure lucrative consulting work from their corporate clients.

Andersen's attempts at negotiating a settlement with federal prosecutors failed earlier this year.

And last month, a US judge turned down a request from Andersen's lawyers to delay the trial on the grounds that negative media coverage of the Enron affair would affect the jury's impartiality.

Some jurors are to be selected from areas outside Houston, so as to avoid possible anti-Enron bias within the city itself.

Under US jury selection procedures, each side is given the chance to object to the other's choice of juror.

Civil action

Andersen is facing a separate civil lawsuit from a group of aggrieved Enron investors and former employees, many of whom lost their retirement savings when the company collapsed.

The fallout of the Enron affair has severely damaged the Andersen brand, with many of its partnerships outside the US choosing to merge with one or other of the audit firm's global rivals.

Andersen is the smallest of the five global accounting groups. The other four are Ernst & Young, Deloitte & Touche, KPMG, and PwC.