Enron Corp. - University of California | Office of The President

annually by independent accountants, auditors have been the investing public's watch dog. Indeed
the United States Supreme Court affirmed that responsibility:
By certifying the public reports that collectively depict a corporation's financial
status, the independent auditor assumes a public responsibility transcending any
employment relationship with the client. The independent public accountant
performing this special function owes ultimate allegiance to the corporation's
creditors and stockholders, as well as to the investing public. This "public watchdog"
function demands that the accountant maintain total independence from the client at
all times and requires complete fidelity to the public trust.
United States v. Arthur Young & Co., 465 U.S. 805, 817-18 (1984). Andersen however, turned its
back on its responsibilities to Enron's investors and the investing public, and abandoned its
professional standards by helping Enron perpetrate the massive accounting fraud as alleged herein.
899. Andersen falsely represented that Enron's financial statements for 97, 98, 99 and 00
were presented in accordance with GAAP and that Andersen's audits of Enron's financial statements
had been performed in accordance with Generally Accepted Auditing Standards ("GAAS").
Andersen also consented to the incorporation of its reports on Enron's financial statements in Enron's
Form 10-Ks for those years and in Enron's Registration Statements for the Company's: (i) registration
of $1 billion in Enron Debt Securities, Warrants, Preferred Stock and Depository Shares filed on
12/17/97; (ii) registration of 488,566 shares of common stock filed on 1/12/98; (iii) registration of
34.5 million shares of common stock filed on 4/21/98; (iv) registration of $1 billion in Enron Debt
Securities, Warrants, Preferred Stock and Depository Shares filed on 1/12/99; (v) registration of 7.6
million shares of common stock filed on 4/5/99; (vi) registration of ten million Exchangeable Notes
filed on 7/23/99; (vii) registration of 4.9 million shares of common stock filed on 4/4/00; (viii)
registration of 616,778 shares of common stock on 6/15/00; (ix) registration of $1 billion in Enron
Debt Securities, Warrants, Preferred Stock and Depository Shares filed on 7/19/00; and
(x) registration of $1.9 billion in Zero Coupon Convertible Senior Notes due 2021 filed on 6/1/01.
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