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Arthur Andersen Name Returns Decade After Firm’s Collapse

Former SEC Chief Accountant Lynn Turner
Lynn Turner, a former chief accountant at the U.S. Securities and Exchange Commission who helped write the law, said it’s “incredible” that a company would seek to revive the Andersen name. Photographer: Peter Foley/Bloomberg

Sept. 2 (Bloomberg) -- More than a decade after Enron Corp. auditor Arthur Andersen cratered in the wake of a federal indictment, some of its former partners are resurrecting the name.

WTAS LLC, a San Francisco-based tax consultancy founded out of Andersen’s ashes, will go by AndersenTax as of today. The new identity is designed to capitalize on the defunct firm’s reputation for quality work -- before it was sullied in 2002 by charges of document shredding and obstructing a Justice Department investigation into book-cooking at Enron.

“Our issues with Enron were the mistake of a few,” said Mark Vorsatz, WTAS’s chief executive officer, who started the company 12 years ago with 22 other former Andersen partners. “Irrespective of Enron, we thought we were the benchmark in the industry.”

While the newly christened AndersenTax is counting on the name change to set the firm apart as it expands in the U.S. and overseas, the moniker may dredge up memories of the accounting scandals that drove Enron, WorldCom Inc. and other companies into bankruptcy. The corporate failures cost shareholders billions of dollars and spurred Congress to push through tougher oversight of auditors in the 2002 Sarbanes-Oxley Act.

Lynn Turner, a former chief accountant at the U.S. Securities and Exchange Commission who helped write the law, said it’s “incredible” that a company would seek to revive the Andersen name.

“Unbelievable,” he said. “It’s like some people just live in their own world.”

Fraud Symbol

Vorsatz said he takes issue with those who see Arthur Andersen as symbolic of accounting fraud. The firm’s conviction, he notes, was overturned by the U.S. Supreme Court in 2005. It was too late, however, to prevent some 85,000 people -- most not involved with Enron -- from losing their jobs. Enron, a Houston-based energy-trading firm, collapsed in 2001.

Vorsatz said his firm, which has 150 partners and about 1,000 employees, paid a sum he declined to disclose for the rights to the Andersen name. Calling it AndersenTax underscores that the firm doesn’t do auditing, he said.

WTAS also did polling on the change and has been getting public relations advice.

“This was a fairly thoughtful, deliberative decision,” Vorsatz said.

‘Decision Makers’

As part of its research, WTAS surveyed 286 “tax services decision makers” in the U.S., U.K., France and China and found that more than half the respondents in all four countries had a “very favorable” or “somewhat favorable” view of Arthur Andersen. It also showed that at least half of those polled in each country would be “much more likely” or “somewhat more likely” to work with a “respected global tax advisory firm” that changed its name to Andersen.

On the flip side, the poll showed that more than 60 percent of those surveyed in the U.S., U.K. and France saw Andersen as a “tarnished brand.” In China it was 44 percent.

Regardless of how the public feels about the new name, Vorsatz said he’s already hearing praise from Andersen alumni. Many are eager to have their former employer’s reputation restored, he said.

“I had colleagues who worked there for 30 years and retired, and they are walking around with a big stain on their chest,” Vorsatz said. “We’re going to change that.”

To contact the reporter on this story: Robert Schmidt in Washington at rschmidt5@bloomberg.net

To contact the editors responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net; Jesse Westbrook at jwestbrook1@bloomberg.net; Gregory Mott at gmott1@bloomberg.net Gregory Mott

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