It's up to businesses to restore confidence

The recent guilty verdict against Arthur Andersen, one of the nation's giant accounting firms, may have a widespread effect on business practices, but the real question is whether or not the jury's decision will do anything to restore public confidence in the dealings of America's corporations.

Andersen is the first major casualty in the long-running investigation into the collapse of Enron, an energy-trading company that filed for bankruptcy last December

According to prosecutors, Andersen had intimate knowledge of Enron's off-the-books partnerships that boosted its public image of financial strength and masked huge amounts of debt. In the case against Andersen, prosecutors claimed important documents relating to these Enron activities were deliberately destroyed.

Jurors believed the prosecution's evidence.

As a result, Andersen is likely to lose all of its 2,300 publicly traded clients, of which 800 have already severed their relationships. Under Securities and Exchange Commission rules, any accounting firm convicted of a felony may not audit public companies. Without this base, Andersen faces an uncertain future, even though some of the company's officials said they intend to do everything possible to keep the company going.

The Enron collapse, Andersen's role and the jury's findings are all generating repercussions in the U.S. economy.

Stockholders and business partners are more leery of business deals. Accounting firms that have no charges whatsoever pending against them are being examined under a microscope. Stock-market investors in general continue to display the sort of jitters that keep prices from finding solid footing.

Much of this complex situation, however, is the result of only a handful of individuals. In Andersen's case, it was perhaps the poor judgment of one person who chose to shred documents that is bringing down one of the most respected names in the accounting industry.

There is no question that Americans want some evidence of changes in business and accounting practices that will restore their confidence.

Without some sense that trust and honesty are still valuable commodities, the public's queasiness about their money's future will be hard to cure.

While tighter regulations may, indeed, be needed, it is going to take a broad display of confidence-building actions and decisions by corporate America to send the message investors want to hear.