Andersen official: Nevada office won’t lose much business

Chris Jones

Thursday, Feb. 21, 2002 | 11:03 a.m.

Arthur Andersen's top local official said the Enron scandal has had little effect on the firm's Nevada operations.

Steve Comer, managing partner of Andersen's Las Vegas office, said his 100-person staff has been busy addressing both internal and external concerns that stem from the recent allegations of improprieties committed by employees of Andersen's Houston office that surfaced during the collapse of Enron Corp.

So far, Comer's efforts to maintain a positive corporate image have been largely succesful: only one large Nevada business -- the Hard Rock hotel-casino -- has dropped Andersen's accounting and auditing services.

Despite that relative stability, however, Comer said he still expects some local fallout from the Enron saga.

"Nationally, it would be naive of anybody to think we're not going to lose clients," Comer said. "We'll lose some on a local basis, but our vulnerability is from those who haven't worked with us for very long because they don't know our people."

The Hard Rock worked with Andersen for less than a year, Comer said. The Las Vegas-based resort operator's filings with the Securities and Exchange Commission said Andersen last year conducted three quarterly reviews for the company. It also told the SEC it had no disagreements with Andersen's quality of work.

"When this (Enron scandal) hit, they just decided they were not comfortable with us," Comer said.

To prevent similar defections, Comer said his staff has met with nearly all of its local clients to calm fears about Andersen's practices. The firm's longtime clients have remained supportive, Comer said.

"Until we know all the facts (surrounding Andersen's involvement with Enron), most of our clients have said they aren't going to draw any conclusions," Comer said.

Representatives from local clients such as MGM MIRAGE, Mandalay Resort Group and Hilton Hotels Corp. told Reuters Feb. 10 their companies don't intend to dismiss Andersen as their auditor. Southwest Gas Corp. spokesman Roger Buehrer said his company also plans to continue its longtime relationship with Andersen. "We feel very strongly that Andersen has been a good partner," Buehrer said.

Efforts to maintain employee morale have also increased, Comer said. Andersen has used town hall meetings and videoconferences with corporate officials to resolve its workers' concerns and some local executives have traveled to several nearby colleges to discuss the company's situation with prospective hires.

Andersen's new corporate policies limiting outside consulting and internal auditing of large publicly traded companies will have almost no effect on its Las Vegas operations, Comer said.

The Nevada State Board of Accountancy does not rank firms by size, but Comer estimated Andersen's employee total and annual billings would place it as one of the top two accounting firms in Southern Nevada.

Andersen does not disclose its local earnings, but the company reported global net revenue of $9.3 billion for the fiscal year ended Aug. 31, 2001.