STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9953
 
                   IN ASSEMBLY
 
                                      March 4, 2002
                                       ___________
 
        Introduced  by M. of A. BARRA, ALFANO, SPANO -- Multi-Sponsored by -- M.
          of A. BROWN, DAVIS, FINCH, MILLER, THIELE -- read once and referred to
          the Committee on Governmental Operations
 
        AN ACT in relation to prohibiting the state from employing the  services
          of the accounting firm Andersen, LLP
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Notwithstanding any other provision of law, no  department,
     2  bureau,  board,  commission, authority or any other agency or instrumen-
     3  tality of the state shall contract for, employ or otherwise  engage  the
     4  services  of  the accounting firm Andersen, LLP. Any department, bureau,
     5  board, commission, authority or any other agency or  instrumentality  of
     6  the  state  that have contracts with Andersen, LLP on the effective date
     7  of this act shall review such contract within six months of  the  effec-
     8  tive  date  of  this act to determine if Andersen, LLP is performing its
     9  duties pursuant to such contracts.
    10    § 2. This act shall take effect immediately.
 
 
 
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14632-01-2

 
BILL NUMBER: A9953
 
SPONSOR: Barra (MS)

 
TITLE OF BILL:  An act in relation to prohibiting the state from
employing the services of the accounting firm Andersen, LLP
 
 
SUMMARY OF SPECIFIC PROVISIONS:  Notwithstanding any other provision
of law, no department, bureau, board, commission, authority or any other
agency or instrumentality of the state shall contract for, employ or
otherwise engage the services of the accounting firm Andersen, LLP.
 
 
PURPOSE OR GENERAL IDEA: New York should take the lead in protecting
its citizens from the practice of using auditing firms as business
consultants, as in the case of Enron Corporation using the firm of
Andersen, LLP as both auditor and business consultant. This bill could
be the first step in reforming the practice of using accounting firms to
report performance that confirms their own counsel as business consult-
ants.
 
 
JUSTIFICATION:The bankruptcy of the Enron Corporation brought to the
forefront the questionable practice of the conflicted role of the audit-
ing firms, in this case the firm of Arthur Andersen. It is common prac-
tice for many corporations to retain the services of outside accountants
as business consultants. One would wonder if an independent audit might
have raised early warning signs and prevented the financial catastrophe
that ensued.
 
 
PRIOR LEGISLATIVE HISTORY: NONE
 
 
FISCAL IMPLICATIONS: NONE
 
 
EFFECTIVE DATE: This act shall take effect immediately