It was ranked 10th having finished in the bottom 20 of 3062 companies in 2000 when it pulled the
It was ranked 10th having finished in the bottom 20 of 3,062 companies in 2000 when it pulled the plug on Rover.. Deloittes & Touche yesterday became the last of the Big Five accountancy firms to bow to pressure and agree to split off its consulting business in the wake of the Enron scandal. Deloitte has poached three Andersen partners in the UK, Stuart Henderson, Paul Schofield and David Holstead, who all worked in its Cambridge office. John Connolly, senior partner and chief executive of Deloitte, said he still did not accept the need to separate the consulting business but market perceptions made it necessary.Andersen worked as both auditor and consultant to Enron, which hid massive debts off its balance sheet. It has been suggested that when a firm provides lucrative consulting services to a client, its audit work may be less vigorous.
“In the US in particular we have seen companies subject to criticism if they have appointed consultants from the same firm as their auditors. Seeing that, we had to move towards a split although our preference has always been to keep the firm combined,” Mr Connolly said.PricewaterhouseCoopers announced last week that it will spin off its consulting arm, while Ernst & Young has already sold its consulting business to Cap Gemini. KPMG has listed its US consultancy and its other consulting businesses are expected to follow. At Andersen, there was an acrimonious demerger of its consulting arm, now called Accenture, but it subsequently built up another consulting business – this will now also have to go.Deloitte, the number two firm worldwide, is said to be the only Big Five firm where its accountancy and consulting businesses actually got along well together. Rob Anderson, head of Edengene, a management consultancy, said: “There has been long-standing mistrust between the accountants and the consultants who wear the sharp suits and earn much more.”The accountants see the work of consultants as disruptive to the steady audit business they do for a client.
The consultants resent the pin-striped dull auditors who tend to hold the top positions at firm.”Mr Anderson said the consultants were usually keen to split their business off, as they could cash in through a flotation or sale The Enron affair has made that separation compulsory “I think the split is absolutely right. I struggle to think of any projects where [they] can work together. They can cross-market each other but working together is not in the interests of clients,” he said.Deloitte has 6,531 employees on the accountancy side of the business and around 1,000 in the consulting arm. The firm has yet to decide how and when it will split the business.. The price of gold surged above the psychological $300 barrier yesterday as worried investors dumped risky stocks in search of safe assets.
“However, I see no reason why it should slide back down to $280.”Wall Street brushed aside figures showing that the productivity of American workers grew faster than expected in the weeks after 11 September. By mid-session the Dow Jones had lost 0.5 per cent and the Nasdaq was down 1.5 per cent.Richard Batty, a quantitative strategist at HSBC, said there was a flight to quality assets but added that there was no strict pattern in terms of defensive or cyclical stocks.”It is a question of looking at stocks on a case-by-case basis,” he said.. City investment banks were aware of the irregular trading activities behind the $750m (£530m) fraud that surfaced yesterday at Allied Irish Banks. He sought to cover his losses by creating fictitious options contracts that appeared to provide a hedge against his positions.Senior figures within the City’s investment banks said that the large transactions coming out of a relatively small Baltimore-based player in foreign exchange trading had created suspicion among some of those banks that were counterparties to the transactions. “There is some level of responsibility with banks in the open market,” said one senior foreign exchange manager. “If I had been head of treasury I would have taken it upon myself to let AIB know that we were awfully appreciative of this business.”Said another: “Lots of big transactions coming out of Baltimore would have been odd. The banks must have known something was up.”Gary Kennedy, AIB’s finance director, said the company’s investigations into the fraud had yet to establish in the identity of all the counterparties to Mr Rusnak’s transactions.