I was somewhat surprised to see this headline from the St. Louis Business Journal the other day: "Missouri accounting board revokes Andersen's license."
I thought I must have read the headline wrong. Then I checked the date: May 7, 2004. So I read on. The article reported that the Missouri State Board of Accountancy revoked Andersen's license to practice in the state.
I found the news somewhat strange, since Andersen itself in August of 2002 voluntarily relinquished or consented to revocation of its firm permits in all states where it was licensed to practice public accountancy with state regulators.
One might also note here that it's been nearly two years since the defunct firm was convicted on a single count of obstruction of justice for destroying documents related to the Enron investigation. The Missouri Board of Accountancy began its investigation of Andersen back in February of 2002, when it was called on to do so by Attorney General Jay Nixon. Andersen had two Missouri-licensed offices, in St. Louis and Kansas City.
I wondered what took so long, especially since two other states -- Texas and California -- that undertook investigations of Andersen at the same time that Missouri began its investigation each revoked the firm's license in 2002.
So I called the Missouri board's executive director, Ken Bishop to find out. The attorney general had asked the board not only to ascertain whether Andersen and its Missouri-licensed entities and employees violated state law and regulations, but also to determine whether their permits to practice in Missouri should be suspended or revoked, as well as to determine whether the Missouri entities and individuals were involved in the demise of Enron.
I found out that the board actually revoked Andersen's license to practice in Missouri in October 2003. Bishop said it was the second part of Nixon's request that proved difficult to fulfill.
"It became difficult when Andersen began reducing their numbers. There was some difficulty in communications once they were no longer practicing," Bishop told me. I could see how that could be a problem.
"We figured there was no urgency to issue a press release [about the revocation] at that point, so we figured we'd wait until we finished our investigation," he added.
But at this point, I wondered aloud, wasn't revoking the license of a firm that no longer exists a mere formality? Bishop informed me otherwise.
It didn't matter that the firm was no longer practicing -- if they exist as an entity, he told me, they could apply to renew their license. But more important, Bishop said, was the end result of the board's investigation into whether any of the Missouri CPAs affiliated with Andersen at the time had any involvement in the misdealings at Enron. According to the Missouri board, they did not. After tracking down and interviewing everyone connected with the Andersen offices in Missouri, the board found no connection between the Missouri CPAs who worked for the fallen firm and what happened in Texas.
"It was important, because those CPAs had spread through other firms. We wanted to remove some of the shadow," Bishop told me.
