PracticeAccounting FirmsAndersen crisis: Competition issue, no issue

Andersen crisis: Competition issue, no issue

Andersen has expressed confidence that its planned salvage operation to merge with KPMG will not raise any competition concerns, despite admitting there are a mass of 'issues still to be worked out'.

The confident prediction came on Tuesday as Andersen revealed it expects to complete the merger – which does not include its US operation – before KPMG’s new accounting year begins on 1 October. It expects the UK merger will be concluded much sooner than other national offices.

John Ormerod, UK senior managing partner for Andersen, said the two firms sought guidance and admitted there were competition issues to answer.

But he added: ‘This is an unprecedented case. We’ve been in contact with the authorities and we expect them to understand and react in a favourable light.’

One way Andersen may pacify regulators is to split off its consultancy arm – just two years after losing Andersen Consulting, now called Accenture. This policy would also neatly tie in with KPMG’s aim of selling off its consultancy business.

Under the plans the Andersen name would disappear but Ormerod said the change would be reviewed with market research soon after. However, there seems little likelihood the 89-year old Andersen brand will survive.

Ormerod was also eager to make clear the move to KPMG was the best ‘choice’ for the firm, despite Deloitte & Touche pulling out of talks once the indictments emerged. The firm has let it be known it has a plan B in place should the KPMG move fall through, although no talks have so far been carried out with any mid-tier firm.

Ormerod also reiterated his confidence that UK partners would not be liable for the claims made against the firm in the US.

He added: ‘The UK arm is a separate legal entity and no questions have been raised here regarding our legal position. I see no reason why the liability issue will arise here in the UK.’

Related Articles

Johnston Carmichael CEO appointed as ICAS president

Accounting Firms Johnston Carmichael CEO appointed as ICAS president

3w Emma Smith, Managing Editor
British Accountancy Awards 2018 – entries open!

Accounting Firms British Accountancy Awards 2018 – entries open!

1m Emma Smith, Managing Editor
Is the accountancy sector facing an international talent crisis?

Accounting Firms Is the accountancy sector facing an international talent crisis?

1m Lewis Silkin
RSM appoints new Chief Operating Officer

Accounting Firms RSM appoints new Chief Operating Officer

1m Alia Shoaib, Reporter
RSM announces 11 partner promotions

Accounting Firms RSM announces 11 partner promotions

2m Emma Smith, Managing Editor
BDO hires former AstraZeneca creative director as head of digital and innovation

Accounting Firms BDO hires former AstraZeneca creative director as head of digital and innovation

2m Emma Smith, Managing Editor
What does the future hold for listed accountancy firms?

Accounting Firms What does the future hold for listed accountancy firms?

2m Fergus Payne, Lewis Silkin
EY, Deloitte lead Big Four in gender pay gap reporting

Accounting Firms EY, Deloitte lead Big Four in gender pay gap reporting

2m Emma Smith, Managing Editor