The Enron Effects and the Former Andersen Clients' Auditor Selection in the Electric Services and Natural Gas Industry

Winifred D. Scott

Document Type

Article

Source of Publication

SSRN Electronic Journal

Publication Date

1-1-2004

Abstract

The effects of Enron debacle was not an isolated corporate failure, but was closely tied to the collapse of deregulation of energy prices and the rolling blackouts in California. This paper reviews the Enron effects in the electric services and natural gas industry and presents evidence on whether auditors increased their existing market share within this industry. Andersen's audit clients, 31% of the industry, were forced to find a new auditor to comply with SEC filing requirements of their annual audited 10K statements. The results indicate that D&T and PWC absorbed 86% of the former Andersen clients and are the leading industry specialist, whether it is measured in terms of sales or number of audit clients. Our results may be helpful to regulators as they consider the costs and benefits associated with the changing levels of auditor market concentration in the electric services and natural gas industry.

ISSN

1556-5068

Publisher

Elsevier BV

Disciplines

Business

Indexed in Scopus

no

Open Access

no

Link to Full Text

Share

COinS