New York (May 6, 2002) -- As what's left of embattled accounting firm Arthur Andersen unravels, former Federal Reserve Chairman Paul Volcker, who was charged with overseeing the Big Five firm's flailing reform efforts, shared his thoughts on the state of the profession and what happened at Andersen in an interview with Fortune magazine reporter Bethany McLean Thursday.
"I had a very romantic notion -- I still get romantic at the age of 75 -- that maybe I can have an impact on changing things," Volcker said of his much-discussed plan to rebuild Andersen as an audit-only entity. "I saw Andersen as a vehicle for showing how an audit firm ought to operate."
The hour-long session took place as part of Baruch College's Financial Reporting conference in New York.
Responding to the question of whether a Big Five firm could survive in today's world as an audit-only entity, Volcker replied, "I think a first class audit firm can survive without the consulting business, as they did up until fairly recently." But he added, "Getting rid of consulting is not going to solve the first problem. The first problem is getting the audit right."
Last week, talks of civil settlement in Enron's bankruptcy case crumbled. Andersen's trial on obstruction of justice charges is slated to begin today.
-- Melissa Klein
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