New York (March 29, 2002) -- In what has been termed a "return to its roots," Andersen leaders at a press conference here said the firm would forge ahead with the transition to an audit-only concern proposed by Oversight Board chairman Paul Volcker.
Audit partners C.E. Andrews and Larry Rieger have been tapped to lead the team that will rebuild the audit-centric Andersen, Volcker announced at a midtown press conference Friday morning. Volcker said one of the conditions he laid out in his plan -- that a critical mass of Andersen audit partners commit to the plan -- has been met. Negotiations are still underway for two other stipulations -- that the Department of Justice dismiss its criminal indictment against the firm and the settlement of all class action lawsuits and Securities and Exchange Commission actions, Volcker said.
While he admitted there were "some snags" to work out, Volcker said, "I think there are good prospects for an agreement in principle." Volcker also noted that he would have a "personal interest" in the firm's negotiations with Justice.
The move away from non-audit services will result in a scaled-back Andersen. Andrews noted that about 60 percent of the firm's U.S. partners are not in audit. "A large number of the firm's 85,000 people are not going to be a part of the audit firm," Volcker said, adding that some of the retention process would be "self-selection."
Whether Andersen's foreign audit practices will maintain ties with the U.S. entity will depend largely on the status of the indictment. "They have to make their own decisions about what to do," Volcker said of the overseas partnerships.
-- Melissa Klein
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