Waste Management, source of previous Andersen woes, fires firm

HOUSTON - Waste Management Inc., which stuck with Arthur Andersen LLP as its auditor despite two separate accounting lapses, has fired the accounting firm. <br> <br> Ernst & Young LLP will begin auditing Waste Management&#39;s books immediately, the nation&#39;s largest trash hauler said Friday, a day after its board unanimously approved the switch. <br> <br> &#34;We simply feel that our responsibility to our shareholders dictated a review of our outside auditor (Andersen) at this time,&#34; said A. Maurice Myers, who was hired in late 1999 as chairman and chief executive after a $250 million revenue shortfall prompted a management shake-up. <br> <br> Andersen has been fighting to save its reputation and survive its role in the Enron Corp. scandal after being indicted on a charge of obstruction of justice for shredding documents. Chicago-based Andersen, which denies that it improperly destroyed documents, did not immediately respond to a request for comment Friday. <br> <br> Waste Management had been Andersen&#39;s largest embarrassment before Enron. The Securities and Exchange Commission alleged that Andersen inflated the company&#39;s earnings by more than $1 billion in the 1990s. In 1998, the trash hauler restated earnings from 1992-97 and Andersen paid Waste Management a settlement amount that never was disclosed. <br> <br> Last June, Andersen agreed to pay a $7 million SEC fine, though the firm did not admit or deny the agency&#39;s allegations that it &#34;knowingly or recklessly&#34; issued false and misleading audit reports. <br> <br> After a Houston rival bought Waste Management and adopted its name, the combined company&#39;s auditing work was performed out of Andersen&#39;s Houston office, Waste Management spokeswoman Sarah Voss said. <br> <br> Yet Waste Management again was forced to restate earnings in 1999 and Andersen paid the company $20 million as a result, Waste Management said last year. The two restatements cost Waste Management and Andersen more than $600 million in combined lawsuit settlements. <br> <br> Myers said the change in accounting firms was not a reflection on the current Andersen auditors checking the company&#39;s books. <br> <br> &#34;This is a new Waste Management with a new executive team pursuing a new strategy,&#34; Myers said. &#34;The selection of Ernst & Young is one more step in firmly establishing a new Waste Management.&#34; <br> <br>

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