Chapter 8. Unraveling

Working for Arthur Andersen was not for everyone. It could be a tough culture. It was much too hierarchical and “top down” for the more free-spirited. Many people left after less than two years, believing the rewards did not warrant the demands that were made on them. Others learned to play by the rules, and some even thrived. To remain in the firm, staff members were expected to work hard, respect the authority of rank, and maintain a high level of conformity. In return, they were rewarded with support, promotion, and the possibility of making partner. Those individuals who made a career with the firm grew old together, professionally as well as personally, and most had never worked anywhere else. To these survivors, Andersen was their second family, and they developed strong loyalties to the firm and its culture.

Despite rumors before the indictment of Arthur Andersen regarding the Enron audit engagement, staff continued to go about daily work activities of traveling to job sites, finalizing reports, or preparing client presentations. Auditors were gearing up for fourth-quarter financial statements. New staff members were on their first assignments. More senior employees were thinking about possible promotion on “Bean Day,” the day people found out whether they would be promoted or asked to leave the firm. Joseph Berardino, Andersen’s newly elected CEO, was in Tokyo, trying to convince his partners not to overreact to the rumors circulating in the U.S., when he got a 2 A.M. phone call on March 2, 2002 letting him know that federal prosecutors were ready to indict Arthur Andersen.