Big Five breaks with Andersen

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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