It remains one of the greatest travesties in the history of American business: In 2001, the 85,000 employees of one of the world's largest accounting firms began losing their jobs in droves. Their employer had become tainted by its loose association with Enron Corp., a financial house of cards that was imploding and taking with it billions of dollars in employee pensions and shareholder investments.
In 2002, accounting firm Arthur Andersen was convicted of charges related to Enron's fraudulent practices. The charges had nothing to do with the quality of their auditing — or any of Enron's illicit practices. The conviction was appealed, and in 2005, the U.S. Supreme Court struck it down in a unanimous vote. But the damage had already been done.
To date, despite millions of records being subpoenaed, there is no evidence Arthur Andersen ever did anything wrong. Still, perceptions are everything: Most people are not aware that the accounting firm, which led the industry in establishing strict, high standards, became a government scapegoat.
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