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#TBT: The Op-Ed By Andersen’s CEO in the Wake of Enron’s Bankruptcy

Enron declared bankruptcy on December 2, 2001. Two days later, Andersen CEO Joe Berardino wrote an op-ed in the Wall Street Journal, responded to the events in a very accountant-like fashion:

My firm is Enron's auditor. We take seriously our responsibilities as participants in this capital-markets system; in particular, our role as auditors of year-end financial statements presented by management. We invest hundreds of millions of dollars each year to improve our audit capabilities, train our people and enhance quality.
When a client fails, we study what happened, from top to bottom, to learn important lessons and do better. We are doing that with Enron. We are cooperating fully with investigations into Enron. If we have made mistakes, we will acknowledge them. If we need to make changes, we will. We are very clear about our responsibilities. What we do is important. So is getting it right.

Enron has admitted that it made some bad investments, was over-leveraged, and authorized dealings that undermined the confidence of investors, credit-rating agencies, and trading counter-parties. Enron's trading business and its revenue streams collapsed, leading to bankruptcy.  

What's funny about this op-ed is that if you were to remove the mentions of Enron, you'd have no idea that it was written almost 14 years ago. Here's another excerpt:

We can't long maintain trust in our capital markets with a financial-reporting system that delivers volumes of complex information about what happened in the past, but leaves some investors with limited understanding of what's happening at the present and what is likely to occur in the future.
The current financial-reporting system was created in the 1930s for the industrial age. That was a time when assets were tangible and investors were sophisticated and few. There were no derivatives. No structured off-balance-sheet financings. No instant stock quotes or mutual funds. No First Call estimates. And no Lou Dobbs or CNBC.
We need to move quickly but carefully to a more dynamic and richer reporting model. Disclosure needs to be continuous, not periodic, to reflect today's 24/7 capital markets. We need to provide several streams of relevant information. We need to expand the number of key performance indicators, beyond earnings per share, to present the information investors really need to understand a company's business model and its business risks, financial structure and operating performance.

This is basically a template for any accounting firm doing damage control. Replace "First Call" with "Bloomberg" and "Lou Dobbs" with "Jim Cramer" and you'll be prepared to handle any audit failure crisis that comes your way.

The best part is the ending:

Enron reminds us that the system can and must be improved. We are prepared to do our part.   

Andersen surrendered its CPA licenses and right to practice before the SEC on August 31, 2002. 

Enron: A Wake-Up Call [WSJ via @eisingerj]