Andersen and E&Y in rescue talks

The firm has been in negotiations to sell itself off to Deloitte Touche Tohmatsu, with talks having taken place in New York, led by the firms’ chief executives, Joe Berardino from Andersen and James Copeland from Deloittes, and a handful of partners.

However, E&Y is also said to be in talks, while it is expected a decision on Andersen’s future is likely as early as this week, with the firm eager to make an announcement.

Andersen and Ernst & Young refused to comment on any negotiations, but it is understood the major obstacle to any merger would centre on Andersen partners becoming potentially ineligible for any of the firm’s possible legal liabilities.

Meanwhile, Paul Volcker, the former chairman of the Federal Reserve hired by Andersen to review its business practice, yesterday said the firm’s audit activities should be separated from its consultancy operations to eliminate perceived conflicts of interest.Deloittes in the UK is compiling an official statement on the possible move.

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