New York (May 7, 2002) -- Paul A. Volcker, the former Federal Reserve chairman tasked with overseeing the reform efforts of embattled firm Andersen, has reportedly suspended his efforts to save the firm."The independent oversight board is in suspension as far as Andersen is concerned, but it wants to stay together to work on reform of the accounting industry," a New York Times report quoted Volcker as saying.
Volcker could not be reached for comment, however his office confirmed Monday that the oversight board's efforts had been suspended.
Volcker had outlined a plan to rebuild the deteriorating firm as an audit-only concern — which would require the sale of all of Andersen's non-audit practice units. But his proposal for a seven-member board, which he would lead, to take over management of the struggling firm, was contingent on a number of actions that never occurred - including the dismissal of the criminal indictment against the firm for obstruction of justice and the settlement of all civil suits against it, as well as the promise by Andersen partners to stay on at the firm.
So far, no deal has been made to sell the firm's consulting and tax units. However, talks are reportedly still under way between Andersen and KPMG Consulting regarding the consulting unit, and with Deloitte & Touche for the tax business.
Jury selection in Andersen's criminal trial began Monday in federal court in Houston. Andersen is facing obstruction charges stemming from the shredding of documents in the audit of bankrupt energy provider Enron.
-- Electronic Accountant Newswire staff
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