Arthur Andersen LLP, based in Chicago, is a holding company and formerly one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron, an energy corporation based in Texas, which had filed for bankruptcy in 2001 and later failed. The other national accounting and consulting firms bought most of the practices of Arthur Andersen. The verdict was subsequently overturned by the Supreme Court of the United States. The damage to its reputation, however, has prevented it from returning as a viable business, though it still nominally exists. Arthur Andersen was responsible for Enron’s accounting and auditing. Fraudulent reports were given by reps from Andersen on Enron’s account that led to filing bankruptcy. A report in October by Enron's law firm, commissioned by the company to investigate an employee's allegations of improper accounting, concluded that Andersen auditors reviewed and approved of transactions by Enron-related partnerships that contributed to the company's collapse. The employee, who made the allegations in an anonymous letter, has been identified as Sharron S. Watkins, an Enron vice president for corporate development.
Andersen was charged based on claims that Andersen employees shredded important documents about Enron's finances, even though they knew the Securities and Exchange Commission was formally looking into Enron. The Justice Department also alleges Andersen employees deleted relevant computer files. The U.S. Justice Department announced the indictment of embattled accounting firm Arthur Andersen