Ormerod goes on defensive post-Enron

The surprise comment, made an interview on the BBC’s Newsnight, came despite the Big Five earning three times as much in non-audit fee income (£675m) as in audit income (£216.4) from FTSE-100 clients last year.

Andersen itself earned three times as much from non-audit work. It generated £9.1m from audit fees, while it saw its non-audit fees leap 136% to £28m during 2001, from eight clients.

Ormerod has also moved to reassure UK companies after he added the viability of Andersen in the UK would not be threatened by the Enron affair.

Meanwhile, Andersen will today find out whether leading package holiday group Airtours will retain the firm as its auditors, following the company’s agm.

The Airtours board sent out a resolution in early January to reappoint the firm, and shareholders are set to vote at the meeting in Manchester. The firm has been its auditor since 1996.

It seems unlikely that the firm will be sacked as the board and audit committee are understood to be happy with the quality of work and the value for money that the firm has provided over the last 12 months.

A spokeswoman for Airtours, said: ‘We can’t predict the outcome of the vote, but there is no question of the board wanting the firm sacked. They are happy to recommend Andersen for another year.’

However, Stuart Bell, research director at Pensions and Investment Research and Consultancy, said: ‘Companies should be regularly reviewing their auditors, but in any case when something like Enron happens, they would be foolish not too.’

Andersen was unable to confirm or deny it followed the principle of one to one audit and non-audit work.

Related reading