Heads roll at audit firm

Arthur Andersen, the accounting firm that has had its reputation severely bruised by the Enron saga, yesterday fired the lead partner involved with auditing the collapsed company.

Andersen, which last week admitted that thousands of Enron documents had been shredded, has also put three other partners on leave pending further investigations.

Andersen's role in the collapse has sparked speculation it may not survive the debacle as an independent company.

In a statement the company said: "Although the firm is still working to collect all the facts, it has learned that, at the direction of the lead partner, an expedited effort to destroy documents in Houston was undertaken."

The company said the decision followed an urgent meeting called by the lead partner, David Duncan, on October 23. That was a week after Enron was plunged into losses after it was forced to disclose a series of indebted offshore ventures. It was also after US financial regulators had requested Enron-related documents.

Critics have said that the failure of Andersen, which received $52m (£36m) in fees from Enron in 2000 alone, highlights the cosy relationship between auditors and their clients. It took outside auditors from Deloitte & Touche just a month to uncover the offshore ventures when the rival firm was brought in by a board member.