Deloitte & Touche is yet to decide how it is to spin off Deloitte Consulting despite announcing its reluctant decision to separate their consultancy business from the firm’s audit operation.
In an interview with Accountancy Age Deloitte’s UK chief executive, John Connolly, said that the Big Five firm was considering a number of options which included a separate private partnership, selling the business or a flotation on the Stock Exchange.
He said: ‘We have not determined quite what route we will take. We’ll probably now spend three or four months talking to partners in consulting and working out which is the best route to achieve it.
‘We’ll take whatever time is needed to get to the right answer.’
PricewaterhouseCoopers took more than a year to decide to float its consultancy after failing to sell it to Hewlett Packard in November of 2000.
Connolly admitted Deloitte’s decision came as a result of recent events in the US following the collapse of Enron, and of business concerns arising from awarding non-audit contracts to auditors.
He said the extensive media coverage of the Enron scandal has caused a shift in public perception and many companies are now reluctant to award management consultancy contracts, particularly big IT projects, to the firm that performs their audit.
‘Our conclusion was that we were putting at risk a lot of business in our consultancy and this was the right action,’ he added.
But Connolly also admitted that the firm did think about a possible separation when the US Securities Exchange Commission reviewed the scope of services offered by accountancy firms two years ago. ‘Clearly then we were resisting, as were all the big firms, any restriction in the scope of services that we were offering to any big clients, but we did explore the options that would be available if we had to resort to this.’
He also said that Deloittes’ announcement not to perform both internal and external audit services for the same company only really related to the US, since the firm had not been doing this in the UK.
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel