March 18, 2002 — The General Services Administration has banned the auditing firm Andersen from new business with the U.S. government after its criminal indictment on charges related to the fall of energy giant Enron.
The agency made the announcement Friday while Andersen reportedly was discussing the possibility of a merger with KPMG, according to CBS MarketWatch.com. Several major companies have fired the auditing firm in recent days.
The GSA suspended Andersen from new federal contracts while the indictment is still in effect, but the announcement will not affect existing federal government contracts, CBS MarketWatch.com said.
The Securities and Exchange Commission said it will allow Anderson to continue to perform audits during the investigation. Andersen has assured the commission that it will audit financial statements in accordance with auditing standards.
The order also affects Enron – the federal government cannot conduct any business with the former giant, its related entities or former executives of the company for a year.
Andersen on Thursday was charged with obstruction of justice in the investigation of Enron.