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CNN Live Sunday

Arthur Andersen Asks Former Fed Chairman to Head Oversight Board

Aired February 03, 2002 - 18:06   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CATHERINE CALLAWAY, CNN ANCHOR: Enron's accounting company is also called on the carpet in that Powers report. Arthur Andersen acknowledges an error in judgment in the way it handled one of Enron's partnerships, but denies responsibility for Enron's collapse. Nonetheless, Andersen is tapping a big name to help clear-up any fuzzy math at the Big Five firm. CNNfn's Allan Chernoff has more.

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ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): Andersen's reputation severely tarnished, the Enron auditor is turning for help to someone with a sterling reputation. Paul Volcker, former chairman of the Federal Reserve, will head an independent oversight board, with a mission to fix Andersen's auditing.

PAUL VOLCKER, CHAIR, ANDERSEN OVERSIGHT BOARD: I can remember when Arthur Andersen, made-in-America auditing firm, accounting firm, was considered the cream of the crop. And I would like to see Andersen return to leadership in the industry.

CHERNOFF: Andersen Chief Executive Joseph Berardino says his firm intends to rebuild its image by improving the quality of its work.

JOSEPH BERARDINO, CEO, ANDERSEN WORLDWIDE SC: This is not window washing. This is not something that just looks good, and then, you know, months later you get a report that says nothing. This is about helping us come up with answers to fundamental questions about what the American public expects from an auditing firm.

CHERNOFF: Andersen's reputation suffered another blow Saturday. An Enron internal investigation led by new board member William Powers found Andersen at fault for signing off on an investment partnership that led to the company's downfall. The Powers report concluded Andersen did not fulfill its professional responsibilities.

Andersen shot back at the report in a statement: "It does not reflect an independently credible assessment of the situation, but instead represents an attempt to insulate the company's leadership and the board of directors from criticism by shifting blame to others."

Mr. Berardino declined further comment.

BERARDINO: There's plenty of time to respond to what may have happened.

CHERNOFF (on camera): Indeed, Mr. Berardino will get plenty of time in front of Congress. He's scheduled to testify before a House subcommittee on Tuesday.

Allan Chernoff, CNN Financial News, New York.

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