The name Arthur Andersen, disgraced in the Enron scandal, is poised to make a comeback in a risky rebranding led by former employees.
In early 2001, the accounting firm, founded in 1913, was one of the US’s largest. Within a year, it was out of business.
Some of the 85,000 Andersen workers who lost their jobs in the aftermath launched a new San Francisco-based firm, WTAS, which avoided audit work in an attempt to distance itself from Enron.
WTAS has grown into an international tax giant, and its leaders have now decided to reclaim the old name as Andersen Tax.
Its chief executive, Mark Vorsatz, said he knows how crazy the move sounds, but he pointed to research among tax-service professionals in the US, Europe and China, which found that after 12 years out of business, the Andersen name had a better reputation than all but three of the largest accounting firms.
Although many respondents surveyed by WTAS said they saw how Andersen could be seen as “a tarnished brand”, more viewed the firm as “high quality” and “ethical”. The surprising results convinced executives that the rebranding was worth the risk.
As Enron’s auditor, it was Andersen’s job to ensure that the firm told investors the truth in its financial reports. But in 2001, Enron, a Wall Street golden child for its unbelievable results, was exposed as a “mind-numbingly complex” spider web of financial maneuvering and hidden debts.
Andersen had also benefited from Enron’s millions in the form of consulting services. Some Andersen executives even took jobs on Enron’s payroll.
While investigators were examining Enron’s accounting issues in 2001, a veteran Andersen auditor ordered a marathon of mass document shredding. The firm was indicted for obstruction of justice, the first criminal charge in history for a major accounting firm. Although the prosecution was dropped in 2005, the damage to the brand was done.
In a letter to clients sent yesterday, Mr Vorsatz wrote that he planned to “reclaim [Andersen’s] legacy of values”. The firm has filed for Andersen trademarks across North America, Europe and Asia.
Mr Vorsatz added: “I recognize that discussions about Enron may resurface as a result of this announcement… we recognise [our] actions are a bold move. We look forward to continuing to work with you as Andersen Tax, and I hope you share our excitement.”
© The Washington Post