Andersen maintains presence at IU

When the news broke that auditing agency Arthur Andersen shredded Enron-related documents, the company's demise was supposed to be imminent. When Andersen was indicted by the Securities and Exchange Commission, when clients like Delta defected, and when the C.E.O. resigned, its demise was supposed to be swift.\nBut so far it has been neither, in part due to strong ties to places like IU and the Kelley School of Business.\nAndersen has maintained "thoughtful and informative" contact with the Kelley School since the first stages of the company's crisis began to unfold, said accounting professor James Pratt. The mishandling of documents in the Enron case should not be indicative of the performance of the entire company, he said.\n"I don't want to discount the severity of the situation," Pratt said. "But the unfortunate situation that occurred in one office is not necessarily representative of the people who work on another audit."\nAndersen employs over 85,000 people in 84 countries and 28,000 people domestically.\nAt the Kelley School of Business, Arthur Andersen is the number one recruiter. In 2001, company officials made close to 85 trips to the Kelley School for career fairs, orientation programs, roundtables and interviews. \nAccording to statistics on the Business Placement Office Web site, notable changes occurred in recruiting patterns this year. Andersen hired only 25 IU students this year, compared to 40 last year. \nThis is coupled with a surge in recruiting experienced by one of Andersen's biggest rivals, Deloitte & Touche. It hired 41 students, compared to only 22 last year.\nJob offers are made in January, said director of the Business Placement Office Randy Powell, so students were aware of accusations of document shredding at the time of their hiring. \nBy Powell's standards, Andersen had an off-year in recruiting. He said they consistently have hired 30 to 40 students for the last 15 years. \nDespite the apparent drop in recruiting, the strong relationship between Andersen and the Kelley School has been reinforced since the Enron scandal was made public, Powell said. Contact has increased with the faculty who generally defend Andersen's position. And students who have been hired by Andersen also have stood up for the company, he said. \n"They put a lot of energy and effort in this school," Powell said. "Andersen is doing a good job of staying in touch with faculty in e-mails and personal visits. They've been down here and met with all the students they made offers to. It has made (the relationship) a little bit stronger."\nThe stronger relationship assumes Andersen survives its indictment for obstruction of justice by the SEC. And even if it does, it may be radically transformed. The Volker proposal in front of the SEC would create a new management team at Andersen in exchange for dropping the charges.\nJohn Hill, professor of accounting, said although the indictment doesn't look good for the future of Andersen, it's not all grim news. \n"It certainly doesn't look good," he said. "From the standpoint of students, I don't think in the long run they are going to be hurt at all. Interest in accounting is up as a result of the Enron thing. Students see all this controversy and it's kind of exciting. If accounting has the potential to be this problematic, then that's kind of interesting."\n Powell has kept in touch with IU alumni who work at Andersen all over the country. They have called him regularly to say the company is still afloat. \n "Alums are still calling me to say it's a great company," he said. "They are extremely distressed that a few could destroy the image of their great company. I don't know what is still going to happen."\n At the moment, everyone is waiting to see how the SEC indictments will pan out.\nLast spring, IU hired Arthur Andersen's consulting division to lead a task force for a massive Review of Non- Academic Administrative Services. The task force made 16 cost-effective recommendations that are now in the stage of being implemented.\nJudy Palmer, chief financial officer at IU led the task force. She was "pleased" with the report Andersen did.\nPalmer said it would be impossible for her to speculate on whether Andersen would be hired by IU in the future, but that "all these factors would certainly come into play."\nGraduate student David Kibiger is president of the accounting fraternity Beta Alpha Psi and the Student Accounting Society. He said the company has always been one of the most active and most visible to work with.\n"Andersen has been wonderful working with us and keeping the relationship alive," Kibiger said. "We don't know what's going to happen to the company. That is still up in the air. Andersen has been awesome in the past."\nKibiger said the document shredding and the since-maligned reputation would not alone sway his decision to seek an auditing job there. \n"The people I've met at Andersen and the type of work they do are excellent," he said. "They are one of the best companies I have seen. Yes, they have problems, but I see it more as a blip on the radar screen." \nA rash of defections from Andersen has been steady. Delta airlines, Sara Lee and Calloway Golf are among the 50 companies who have left the auditing agency. The Hershey Corporation is among those who have decided to stay.\nDick Culp, director of administration for the Indianapolis office of Andersen, downplayed the mounting problems his company faces. "The quality of the company has been called into question by some people looking in from the outside," he said. "But the quality of the company is not in fact questionable. This kind of event could have happened to any of a number of large companies."\nProfessor Pratt spoke differently.\n"It's a very serious situation," he said. "There is a fair amount of uncertainty about what will play out in the end"