New York (Oct. 14, 2003) -- When Ernst & Young revealed in its annual statement late last week that global chief executive Richard S. Bobrow was retiring after just a year on the job, it was yet another blow to the image of the nation's largest accounting firms.
Although E&Y would not publicly comment on the reasons for Bobrow's departure, it is widely believed that he stepped down as the result of a nasty divorce proceeding which laid bare the partnership's closely held financial records to the public -- and its competitors.
With the Big Four firms reeling from two years of accounting-related scandals, as well as controversies over tax shelter advice, the loss of a well-regarded chief executive couldn't have been more poorly timed, said industry consultant Jay Nisberg.
"It's sort of a setback for E&Y," Nisberg said. "My impression is that he was an extremely effective guy and right now the firm is facing challenges that call for high potential leadership. I think it's going to be difficult to replace him and throws the firm into a political tailspin at time when that particular firm needs its focus."
Bobrow, 50, joined the firm in Texas in 1976 and worked his way up through its tax division. During bitter divorce proceedings, Bobrow's estranged wife sought detailed information about her husband's finances. The resulting investigation revealed the U.S. firm's revenue, which was $4.3 billion in 2000, as well as Bobrow's income, which was $3.2 million in 2001. It also showed that Bobrow earned $24 million from the $11.3 billion sale of the firm's consulting unit to Cap Gemini.
James S. Turley, who has held the position of global chairman since 2001 will now also assume the role of chief executive.
-- Tracey Miller-Segarra
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