Whatever the outcome of the trial, the Justice Dept.'s indictment of Arthur Andersen has devastating implications
No major professional-services firm has ever survived criminal indictment. The vast majority of Andersen's 85,000 workers in the U.S. and overseas are innocent bystanders. Now, the livelihoods of many of them are at risk.
A remade Andersen, along the lines of former Fed Chairman Paul Volcker's plan, would have set a new standard for the industry. Now, rivals will feel far less pressure to adopt Volcker's reforms.
LESS FOR VICTIMS
Andersen or an acquirer could have set aside hundreds of millions of dollars for Enron shareholders and ex-staffers who lost billions of dollars in retirement savings. Now, there may be little, if anything, for such victims.
CHAOS FOR CLIENTS
Andersen's 2,300 clients, which include 17% of U.S. public companies, must worry about switching firms. Finding a new auditor with the expertise to deal with complex, unfamiliar financial issues could prove disruptive.