PracticeAccounting FirmsNo support for Andersen audit split

No support for Andersen audit split

With speculation mounting that Andersen is set to announce the separation of its audit arm as early as this week, its Big Five rivals have moved to distance themselves from suggestions that they could follow suit.

Reeling from the loss of longstanding client Merck, a leading drugs company in the US, Andersen is believed to be considering the radical option as part of a package to shore up its battered credibility.

An Andersen spokesperson said: ‘Everything is under discussion but no decision has been reached.’ It is understood the firm is gearing up to make a formal announcement on the issue.

But the move received little support from other Big Five firms. Ted Awty, KPMG’s audit chief in the UK, said audit separation was ‘not an option’ for the firm at the moment and would make the firm less attractive for its staff. ‘We fundamentally believe in the multidisciplinary offering,’ he said.

Other firms, including Deloittes, also said they were not considering such a move, but an Ernst & Young spokesman said: ‘We are keeping an open mind in the post-Enron environment.’

Separately, Andersen said it was expecting the results of the ‘shredding’ investigation to come ‘at any time’, while it is also expected to make a new damages claim offer to Enron shareholders, following the rejection of its opening $260m offer last month. It is thought a quick resolution of the issue may halt a potential exodus of audit clients.

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