"A bird that stalks
down his narrow cage
can seldom see through
his bars of rage
his wings are clipped and
his feet are tied
so he opens his throat to sing."

--Maya Angelou, excerpted from her poem "I know why the caged bird sings"

Former Enron auditor David Duncan sang this week. It was only one note, but it resonated throughout the accounting world and is likely to reverberate for many months to come.

Duncan, tossed out of Andersen on his ear for allegedly shredding hundreds of Enron-related documents to avoid handing them over to federal investigators, pleaded guilty this week to a single charge of obstruction of justice.

In return, he’s agreed to testify against his former employer during its trial on the same federal charge.

While Duncan took the fifth at Congressional hearings into Enron’s demise and the role Andersen may have played in the fiasco, he made it clear from the start that he was a minion following orders from high above when he shredded, and ordered others to shred, reams of documents related to the energy trader’s audit.

Andersen publicly denied that anyone other than Duncan and his Houston-area colleagues conspired to thwart the Securities and Exchange Commission and the Justice Department’s inquiries into Enron. A smoking gun memo left unshredded appears to indicate that Andersen higher-ups were in on the shredding order, even though Andersen claims the memo was merely a routine reiteration of the company’s "document retention policy."

Whatever. Either Andersen will strike a deal with the Justice Department in the next few weeks to avoid their criminal trial – scheduled for early May – or it will take its case to the people and hope that the government’s evidence of a firm-wide conspiracy (aside from Duncan’s oral testimony) will be as flimsy as the firm claims it to be, and they will be exonerated.

In either scenario, Andersen loses. It’s already lost its reputation, its desire to stay in one piece, many of its top audit clients, and its standing as the premiere Big Five tax and accounting firm. Even if it wins a legal battle with the government, it won’t be able to recoup these losses. Whether you view the firm as the government’s sacrificial lamb to the maws of those hungering for Enron retribution, a greedy predator getting rich by aiding corporate shenanigans, or none of the above, the unalterable fact is that Andersen – as we know it – is through.

And as historians crawl over its wreckage, they’d do well to note that this fall from on high started in an unlikely place –with the firing of one auditor.

While Andersen may have initially thought it saved its soul by clipping David Duncan’s wings, they lacked the foresight to assess the impact of a lone voice that knows how to sing.


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