Big Five firm Andersen will face an expanded peer review from Deloitte & Touche as a result of the recent controversy surrounding Andersen's audit practices with regard to energy giant Enron.
The expanded review will include a review of the procedures at Andersen's Houston office, which was in charge of handling the Enron audit.
"In light of recent developments, we believe that extending the peer review to include work done in other offices, including Houston, and other procedures that Deloitte & Touche deems appropriate and necessary is the right thing to do," said Andersen chief executive, Joseph Berardino.
Peer reviews, which are conducted every three years, generally focus on assessing a firm's quality control system for its accounting and auditing practice. The Public Oversight Board oversees peer reviews of U.S. accounting firms. The peer review process started in 1978. No Big Five firm has ever received a qualified review.
Deloitte was in the process of conducting a peer review at Andersen when the Enron situation was made public. Although Andersen has asked for an expansion of the review, sources at Deloitte & Touche have stated that the firm had independently decided to broaden the scope of its review.