Arthur Andersen signalled its intention to hold on to its consulting arm this week, despite moves by other Big Fives to split their operations in the wake of a US securities and Exchange Commission clamp down on audit independence.
Andersen’s stance could lead to a confrontation with the SEC, which is set to announce the results of a wide-ranging review of part of its audit independence rules and meet English ICA officials to discuss the treatment of firms.
PricewaterhouseCoopers, Ernst & Young and KPMG have all announced restructuring plans this year and Andersens had been expected to follow suit.
But the recently rebranded firm denied it is set to unveil plans outlining its intent to sell its own consultancy business, with company officials stating the company is likely to remain integrated.
However when the firm changed its corporate identity in January it spoke of implementing changes and the need to continually look at every possibility.’Andersens is the most likely of the Big Five firms to continue as an integrated company,’ a spokesman said. ‘We are looking at a number of scenarios but no plans are about to be set in stone.’
The firm is in the middle of a messy divorce with Andersen Consulting but has said it intends to increase the focus of its own consultancy arm on e-business.Last week Ernst & Young announced plans to sell off its consultancy business to IT group Cap Gemini. UK chairman Nick Land admitted the move was partially driven by the SEC’s clampdown on audit conflicts of interest.
Last month PwC announced plans to separate its consulting arm from its auditing business with the firm suggesting the SEC’s regulatory crackdown had heavily influenced the decision.
At the end of January KPMG announced it would be incorporating its consulting arm earlier this year involving Cisco Systems taking a 19.9% stake.
This week Deloitte & Touche, the only other Big Five firm yet to announce a change of strategy, said it had no intention to split the structure of its business operations.
However a spokesman, said it would be continuing to monitor the situation in light of the SEC review.