Andersen, the nation's fifth-largest accounting firm, has been subpoenaed for documents related to audits of Houston-based Enron, which has admitted it overstated earnings by $586 million over 4 years.

"We did receive a subpoena in relation to our financial reporting on Enron, which is a customary part of the process," said Dave Tabolt, a U.S partner at the big five accounting practice in charge of leadership communication. He declined to indicate when the subpoenas were issued.

Enron's meltdown in the past few weeks has prompted the massive SEC investigation as well as a host of shareholder lawsuits, including one seeking $600 million in damages, accusing Andersen of fraud, accounting malpractice and misrepresentation.

In June, Andersen agreed to pay $7 million to settle SEC charges it issued false and misleading audit reports about Waste Management of Houston.

Andersen worked as Enron's outside auditor for more than 10 years in a role that is supposed to ensure the company is abiding by legal accounting standards.

Andersen also said Friday that the accounting firm of Deloitte & Touche will expand the scope of its peer review of Andersen's U.S. accounting and audit practice.

The expanded procedures, which have been under consideration for over two weeks, will include review procedures in Andersen's Houston office. Andersen said it asked for additional work "in light of financial reporting issues at Enron Corp."

Peer reviews involve an assessment of a firm's system of quality control for its accounting and auditing practice.

Deloitte & Touche had already independently decided it wanted to conduct additional procedures, the companies said.

"Maintaining the trust and confidence of investors is a central tenet of our firm," said Joseph F. Berardino, managing partner and chief executive officer. "We are confident that our system of quality is strong."

-- Michael Davis , Houston Chronicle