Search the Internet          Tips  Sites: Finance, Investment

Andersen US tax partners to join Deloitte

Andersen said most of its US tax partners would join rival Deloitte & Touche on Thursday, as the world's No 5 accounting firm, facing a criminal charge for its role in the Enron scandal, headed further toward disintegration.

The move comes as Andersen named a new chief executive for its worldwide operations, which are also splintering as deals hatch with different "Big Five" rivals.

In the US, where Andersen is bleeding clients and is expected to cut a quarter of its 28,000 domestic staff next week, Andersen agreed that most of its tax practice partners would join rival Deloitte.

Andersen spokesman Patrick Dorton did not say how many employees would be laid off, but did confirm that job cuts are imminent.

"Given the indictment by the Justice Department of the entire firm, it is inevitable that there will have to be some personnel reductions," he said on Thursday evening.

Andersen has not said how many partners, out of 1,620 in the US, work on tax services.

It gave no details of the deal, which it said could close by the end of this month.

Andersen has been looking to split off its US tax and consulting practices in the United States for several weeks, following recommendations by Paul Volcker, who was brought in by Andersen to advise on remodeling the firm in February.

The former Federal Reserve chairman -- who is looking to save the firm by getting the US Justice Department to drop charges against Andersen for shredding Enron-related documents -- recommended splitting off the tax and consulting units from Andersen's core audit unit.

The move is aimed at countering criticism that accountants raking in consulting and tax fees go soft on companies' audits, as many say happened in Andersen's botched audit of Enron Corp.

Andersen's US tax services bring in about $1 billion in revenues a year, according to outside experts. Andersen has about $4.3 billion in annual US revenues, split roughly equally between audit and non-audit services. The non-audit services comprise tax and consulting practices.

ALSO READ:
The Enron Saga
The Rediff Budget Special
Money

Tell us what you think of this report