Beleaguered accountant Andersen yesterday announced that it has hired an independent overseer and confirmed that it will discontinue offering IT consultancy or internal audit services to its audit clients.
In a move towards improving its image amidst the Enron scandal, the firm has hired former Federal Reserve Board chairman Paul Volcker to head an Independent Oversight Board.
Two days after its Big Five rivals all promised in varying degrees to support laws restricting services offered by accountancy firms, Andersen said that it would not take any new contracts from its publicly traded audit clients for the design or installation of IT systems or for internal audit consultancy.
The changes apply specifically to Arthur Andersen LLP, the firm’s US business, but alongside the IOB, the firm plans to examine appropriate measures to ensure confidence in its global operations.
Andersen has promised the IOB ‘free access to all information relevant to a full review of the policies and procedures of the firm’ and has agreed to be bound by decisions made by the oversight board as long as they are legally permissible.
Following Enron’s release on Saturday of report of its internal examination, Andersen issued a statement criticizing the document as an attempt to ‘insulate the company’s leadership and the Board of Directors from criticism by shifting blame to others’.
Yesterday former Enron CEO Ken Lay said he will not attend Capitol Hill hearings investigating the company’s collapse next week.