PracticeConsultingBig Five breaks with Andersen

Big Five breaks with Andersen

The alliance pulled together between the Big Five firms in the wake of the Enron collapse has come under pressure as senior figures began to distance themselves from embattled auditor Andersen, this week.

Accusing Andersen’s senior partner of ‘speaking without thinking’, one European-based senior partner of a Big Five firm said the affair was ‘very damaging’ to the profession.

The news will come as a blow to Andersen, which had been hoping for support from its competitors as it struggled to maintain the confidence of politicians and US investors.

Another senior partner told Accountancy Age: ‘It’s a nightmare for Andersens, and I say that with no pleasure.’

The alliance between the firms was hastily formed after energy giant Enron filed for bankruptcy after a huge restatement of its accounts.

The firms issued a joint statement calling on the profession to get its house in order, but the message was dismissed by a senior partner who said: ‘It took one and a half pages to say nothing.’

The cracks emerged after CE Andrews, Andersen global head of auditing, and Joe Berardino, Andersen’s US senior partner, testified before a congressional committee. Berardino admitted the auditors had made ‘an error of judgement’ over the treatment of Enron’s off-balance sheet vehicles.

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