The US Justice Department has rejected an offer from Andersen to settle an obstruction of justice charge arising from the Enron collapse, the accounting firm said.
Faced with a May 6th trial on the criminal charge stemming from Andersen's role in the collapse of energy trader Enron the firm proposed yesterday a last-ditch offer to settle with the government.
"Now we just continue to prepare for trial. I don't think there's anything left to talk to the government about," Mr Rusty Hardin, attorney for the Chicago-based firm, said.
A Justice Department spokesman said the agency had no comment.
The Big Five firm had said it would acknowledge its employees should not have destroyed thousands of Enron-related audit documents last fall after learning the Securities and Exchange Commission wanted to inspect the files.
Andersen had also been willing to submit to a form of legal probation but has refused to plead guilty to the obstruction charge. The firm was said to be at odds with the department over the terms and scope of the probation.
Houston-based Enron filed the largest bankruptcy in US history in December, wiping out billions of dollars in equity and triggering a crisis of confidence in US stock markets.
Andersen has been accused of blessing Enron's alleged use of a vast web of off-balance sheet entities to deceive investors, hide losses and enrich senior executives.