Which accounting firm was convicted in 2002 for its role in Enron's collapse?

Which accounting firm was convicted in 2002 for its role in Enron’s collapse? Arthur Andersen. The firm was convicted of obstruction of justice after employees destroyed Enron-related documents while regulators were investigating the energy company.

Arthur Andersen was one of the Big Five accounting firms and served as Enron’s auditor. Enron’s financial statements concealed debt and losses through complex arrangements and aggressive accounting. Andersen auditors faced criticism for failing to challenge those practices, while the firm’s Houston office came under scrutiny for shredding documents and deleting files connected to the Enron audit.

A jury found Arthur Andersen guilty on June 15, 2002. Because federal rules barred convicted felons from auditing public companies, the firm surrendered its U.S. CPA licenses and effectively ceased operating. Thousands of employees lost their jobs, even though only a portion of the firm’s personnel were directly involved in the document destruction.

There is an important legal footnote: the U.S. Supreme Court overturned the conviction in 2005 because the trial judge’s jury instructions were flawed. By then, however, the firm’s reputation and business had already collapsed, so it did not return as a major audit practice.