Big Five stand up to critics
In a rare turn of events Andersen and its Big Five rivals have banded together in a pledge to address financial reporting issues laid bare by the Enron collapse.
Yesterday Andersen, currently facing intense scrutiny for its role as auditor of Enron, Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers issued a joint statement saying they would make recommendations to the US Securities and Exchange Commission about disclosure of some of the items which have left SEC investigators troubled.
The Big Five firms however insist that self-regulation remains the best policy for ‘investors, the profession and the financial markets.’
Chief executives of the Big Five said ‘backward-looking financial statements delivered on a periodic basis no longer are sufficient to communicate real value and risk,’ according to the New York Times.
The Big Five’s united front against critics follows a letter sent by Andersen?s chief executive Joe Berardino to the Wall Street Journal saying there are widespread problems with the whole financial accounting system. He said that poor performance by almost every profession involved with the company, from investment bankers to credit rating agencies, contributed to its collapse.
Berardino lambasted the ‘broken financial-reporting model,’ which he called ‘out of date and unresponsive to today’s new business models, complex financial structures and associated business risks.’
‘We are co-operating fully with investigations into Enron. If we have made mistakes, we will acknowledge them. If we need to make changes, we will,’ wrote Berardino.
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