"I obstructed justice. I instructed people on the engagement team to follow the document-retention policy. I knew it would result in the destruction of documents," Duncan said.

Duncan was fired by Andersen in January and in April agreed to plead guilty and testify on behalf of federal prosecutors in exchange for leniency in sentencing. He risks up to 10 years in prison.

In questioning Duncan, which began late in the afternoon and is expected to last until Wednesday, the ex-partner stated he had close relationships with a handful of Enron executives that were previous Arthur Andersen employees. He read over a detailed list of "AA Employees Who Left for Enron" that was maintained by Andersen.

Andersen, which has balked at the Justice Department's indictment stating the entire firm should not be responsible for the poor judgment of a few, faces a maximum 5 years probation and a fine of up to $500,000 if convicted. On top of this, additional fines and penalties could be charged against the firm, likely putting it out of business.

The trial thus far has been dominated by the firm's document-retention policy, which calls for the retention of papers, emails and other materials considered important to projects and to destroy drafts, extraneous or redundant documents or other items considered unnecessary.

Earlier Monday, prosecutors presented an email written by Andersen lawyer Nancy Temple October 9 -- before the document shredding began -- about a possible Securities and Exchange Commission probe. The email could be understood as evidence that Andersen was planning to destroy documents that would be sought by the SEC.

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