CHICAGO — What did Arthur Andersen know, and how could it have approved financial statements full of corporate chicanery?

        The questions that arose in Enron's meltdown have surfaced again with WorldCom. And while Andersen blames WorldCom for the latest debacle, some experts say the manipulation of the telecommunications giant's books should have been clearly evident to its former auditor.

        Accounting professor Roman Weil said the concept is so fundamental that he teaches it in the second week of class at the University of Chicago Graduate School of Business.

        “It's basic accounting stuff,” Mr. Weil said. “An auditor who looked into this would say it's wrong. Andersen said it wasn't consulted. Who knows?”

        WorldCom's bookkeeping maneuvers, while involving a sum several times greater than the amount hidden by Enron, were far simpler and more transparent, according to those familiar with both situations.

        Enron used a complex web of partnerships to conceal more than $1 billion in debt, hedging against losses with an esoteric strategy that experts still find hard to decipher.

        WorldCom, by contrast, counted $3.8 billion in basic telecom costs as long-term investments, making it look far more profitable than it was. Such capital investments can be written off over a period of as long as 40 years, meaning only a fraction of the actual cost is visible to investors on current earnings.

        Arthur Bowman, editor of Atlanta-based Bowman's Accounting Report, said he couldn't fathom how Andersen could have missed it.

        “It wasn't just a one-time booking,” he said. ""Three-point-eight billion dollars is a lot of money to miss.”

        Andersen's response: Just as with Enron, WorldCom officials held back critical material concerning its financial dealings.

        The Chicago-based firm issued a statement this week saying “important information ... was withheld from Andersen auditors by the chief financial officer at WorldCom.” Andersen said the officer — Scott Sullivan, who was fired Tuesday — “did not tell Andersen about” the accounting in question “nor did he consult with Andersen about the accounting treatment.”

        Andersen spokesman Patrick Dorton declined to comment further about the case Thursday, referring back to the earlier statement.

        WorldCom fired Andersen as its auditor in the spring, making it one of many corporate clients to desert the struggling firm after the Enron scandal broke.

        Securities and Exchange Commission investigators who have been looking into WorldCom for months haven't yet accused Andersen of any impropriety in the case. And former SEC chairman David Ruder said Andersen wasn't necessarily at fault, noting that the audit examines a representative sample of a company's financial statements rather than all of them.

        “If a company is intending to make fraudulent entries, it's often very difficult for the auditor to find the fraud,” he said.

        But Andersen nonetheless is coming in for scathing criticism in some quarters for missing such whopping accounting misstatements — under fire again less than two weeks after being convicted of obstruction of justice for shredding Enron documents.

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