Enrons' business model would have worked today

Andersen: Enron failed because of its business model


Investigations into destruction of files

Washington - For the head of accountant Andersen, Joseph Berardino, the Enron collapse is due to the failed business model, not to illegal practices. "As far as I know, nothing we found was illegal," Berardino told NBC on Sunday. "This (Enron) is a company whose business model has failed. The bookkeeping is just a reflection of the outcome of the day-to-day business." For Berardino, Andersen is also in no danger: "I don't think we're finished at all. We'll continue to meet with our customers." Houston-based energy trader Enron was once the stock exchange darling, but collapsed last year in the largest corporate bankruptcy in US history. Andersen is now being criticized for the Enron accounting.Andersen in a crooked light As Enron's auditor, Andersen recently came under fire because Andersen is said to have known of problems surrounding Enron's high-risk partnerships as early as February. As the auditor, Andersen had approved the process of recording billions in risks through partnerships outside of the consolidated balance sheet. Last year, this meant that Enron profits were retrospectively revised downwards by 600 million dollars (680 million euros / 9.4 billion euros). Enron filed for bankruptcy protection under US bankruptcy law in early December 2001. Andersen dismissed Enron's partner David Duncan last week. It was previously known that Duncan had files destroyed when the SEC requested information on Enron. "In our opinion, Duncan has definitely shown extremely poor judgment in destroying the documents," said Berardino. He defended his company against the allegation that Andersen had approved possible conflicts of interest and off-balance sheet financing in return for the fees of around $ 100 million annually. "But we're a $ 10 billion company. That customer had a one percent share of our revenue," said Berardino. "The services that we have provided for Enron were appropriate in every assumed case and were communicated to the supervisory body and the shareholders." Investigations into destruction of files Enron is investigating reports of the destruction of files at its Houston headquarters that allegedly began after the state investigation began. This was announced by a lawyer for the group on Monday evening. (APA / Reuters)

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