A securities and Exchange Commission (SEC) officer testified yesterday that Andersen told regulators it had "learned its lesson" in the Waste Management case for which Enron's former auditor was fined $7 million (€7.7 million).

Mr Thomas Newkirk, the first witness in the government's trial against Andersen for obstruction arising from the Enron collapse, said Mr Gary Goolsby, of Andersen's global risk-management team, assured the SEC the firm would "adopt new procedures" to prevent another Waste Management debacle.

Andersen, which approved inflated financial statements for the Houston-based trash hauler, paid the fine to settle that case just last June. Mr Newkirk also testified to Andersen's faulty role as auditor for Sunbeam, as prosecutors cited company after company with erroneous financial statements audited by Andersen.

Yet, in including Sony in the list of companies, he gave Mr Rusty Hardin, Andersen's lawyer, an opening. Mr Newkirk had testified Andersen was Sony's auditor when it only provided accounting advice for a single transaction. "Are you aware other accounting firms gave Enron advice during the time Andersen was their auditor?" asked Mr Hardin. "Does that make these firms as culpable as Andersen?"

Andersen is accused of shredding Enron-related documents to obstruct authorities investigating what was the firm's second-biggest client. Mr Newkirk also testified that Enron, which declared bankruptcy in December, had restated its earnings in much the same way Andersen's past clients had been forced to.

But Mr Hardin said Mr Newkirk was overstating Enron's position because Enron had not officially restated its earnings. Andersen would not sign off on those revisions amid the controversy surrounding Enron's collapse. Enron only issued a media statement of its intent to restate its earnings.

Mr Hardin is likely to hone in on such slip-ups to cast doubt on the government's portrayal of Andersen as corruptly shredding documents. The government's case has been bolstered by the judge's ruling it could enter Andersen's past transgressions into this case. Mr Hardin asked if Mr Newkirk gave a SEC talk last year at which he asserted he was "going to get Andersen". Mr Newkirk denied it. However, Mr Hardin askedif Mr Newkirk knew the facts about the document destruction at Andersen.