The US Securities and Exchange Commission has fined Andersen $7m for signing off on 'false and misleading' audit reports.

The SEC charged Andersen with breaking federal anti-fraud laws over its audits of Waste Management Inc between 1992 and 1996. The regulator accused the firm of giving unqualified opinions on financial reports that overstated the refuse handling giant's pre-tax income by more than $1bn.

Andersen did not dispute the SEC fraud injunction, and simply agreed to pay the fine without admitting or denying the allegations. 'We made a business decision to put the matter - and the uncertainty of litigation - behind us,' said Terry Hatchett, managing partner for North America.

Four of the firm's partners were censured for improper professional conduct under the SEC's rules of practice. They settled without admitting or denying the SEC allegations and were each fined between $30,000 and $50,000. They were also banned from practising as accountants for periods ranging from one to five years.

'Arthur Andersen and its partners failed to stand up to company management,' said Richard Walker, SEC director of enforcement. 'We will not shy away from pursuing accountants and accounting firms when they fail to live up to their responsibilities.' This is the second time that Andersen has been connected with fraudulent financial statements in as many months (see , June, p11).

According to the regulator, WM was a 'crown jewel' client for Andersen. And between 1971, when it listed, and 1997, every one of the company's CFOs and chief accounting officers had previously worked as auditors at Andersen.

The SEC also revealed that Robert Allgyer, the partner in charge of the WM audit, was directly involved in Accenture's services to the company. The regulator says that Andersen Consulting, as it was called at that time, then billed his time for those services to Waste Management. Allgyer, who has since retired, was one of the four censured partners.