New Enron blow hits Andersen
Just two of Andersen's seven FTSE-100 audit clients gave the troubled firm their full support this week following further revelations about its involvement in the collapse of US energy giant Enron.
Asked directly by Accountancy Age whether they would replace Andersen as auditor, four – BSkyB, British Land, Canary Wharf and Amvescap – refused to comment while WPP said that it was ‘being kept informed of the situation’.
An insider at one of the companies said that all the clients were privately ‘watching and keeping the situation under review’.
Only Shire Pharmaceuticals and Cadbury Schweppes said they were ‘very happy’ with the firm. A spokesman for Cadbury added: ‘Andersen will soon be starting to prepare our 2001 accounts.’
The audit fees of the seven clients alone are worth more than £9m. Total non-audit fees amount to more than £24m. Andersen will be looking forward ominously to late spring and the summer when most of the seven clients will address the issue of reappointing auditors at their agms.
Andersen lost one FTSE-100 client this year when Safeway took its audit elsewhere, but the supermarket said the move was ‘not related’ to Enron.
Reports in the US this week suggested Andersen may be looking for a merger with one of its Big Five rivals.
Separately, Lord Wakeham, the former Tory energy secretary, could face disciplinary action from the ICAEW over his involvement in the Enron affair.
As a chartered accountant, the institute would be required to investigate his role as a non-executive director of Enron if a complaint were to be made against him. The institute said there was no complaint so far. Wakeham is among 50 individuals due to face the US Senate committee investigating Enron’s collapse.