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Shred of Evidence

Learn a lesson from Arthur Andersen: Destroying documents makes you look bad.

By Steven C. Bahls

Opinions expressed by Entrepreneur contributors are their own.

When the Enron scandal was heating up, two accountants at ArthurAndersen worried about memos and records that could implicate thefirm. Suspecting a coming investigation, they geared up an existingcompany policy of destroying all documents not directly related tothe final audit report. Soon, the company was shredding documentsand deleting e-mails right and left.

That was a phenomenally bad idea. Investigators didn't buythe explanation that the firm was merely following its owndocument-retention policy. Whatever trouble the firm might havefaced over turning a blind eye to the financial shell games playedby its biggest client, destroying evidence made it far worse. TheJustice Department indicted the firm for obstruction of justice.Clients fled, and one of the five biggest accounting firms in theworld essentially died. There's a lesson in this for businesseslarge and small.

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