Arthur Andersen imploded not from a "loss of trust", but from being found guilty of obstruction of justice. The firm, as a convicted felon, could not perform audits of publicly traded companies. Between the various accounting and government regulatory agencies (FASB, SEC, etc.), the firm was stripped of their license to practice accounting in several states. Before the final implosion, the firm surrendered their accounting licenses in the remaining states.
Without the ability to perform audits for SEC clients, there was zero chance the firm could stay in business. There was a mad dash out the door of both clients and employees. The remaining "Big 4" accounting firms added to the pain, too. The former AA partners (who had the relationships with their SEC clients) were forced to accept very punitive deals. Bring the client (and your institutional knowledge) with you, but in 2 years you will transfer the client to an existing partner at "New Accounting Firm". You are then on the clock to build up a new book of business (several million $$ of fees) in 2 more years, or else.
I knew several extremely bitter former AA partners that lost their livelihoods, their homes and all their built-up capital in AA due to the criminal activities of persons they never even met. 85,000 worldwide employees at the time AA went down.
Full disclosure, I'm a former Arthur Andersen alum. However, I left the firm long before Enron (by about a decade). I was already sensing the shift in culture when it was converted from Arthur Andersen, Inc. to Arthur Andersen LLP. I thought several partners started to get sloppy thinking "limited liability" sounded really good. To paraphrase the Princess Bride, I don't think it means what they thought it meant.
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