Andersen's Client Losses Continue
Freddie Mac replaced Andersen with PricewaterhouseCoopers, the firm that so far seems to be reaping the largest benefit from Andersen defectors. Freddie Mac will continue to use Andersen for consulting services.
Freddie Mac paid Andersen $1.1 million for audit services in 2000 and $8.2 million for consulting services.
A statement released by Freddie Mac said, "Arthur Andersen has provided Freddie Mac with high quality audit service since 1970, and Freddie Mac will continue to benefit from Arthur Andersen's knowledge and expertise through an ongoing consulting relationship."
Other high-profile companies that have abandoned Andersen as their auditor in recent weeks include Merck, SunTrust, and, of course, Enron.
Number of comments: 10
AccountingWEB.com Mar-7-2002
Categories: News Archives, Auditing, Firms
Times read: 3804
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Chris Kugler , 09 March 2002 @ 21:40 PM
loss leader? I'm just a dumb accounting student... but I was never under the impression that auditing was a "loss leader" ie: they lose money on every audit. In fact I'm sure its very profitable. Maybe not as much as consulting, but firms still make money off audits. And as for Andersen living up to the commitment.... or that they kept the consulting and dumped the auditing..... I'm pretty sure Andersen wasn't asked their opinion. Freddie Mac I'm sure told them that they weren't going to be the auditors. Also, chiding a corp for saying that they had a good relationship with Andersen is rediculious. Seriously folks, if they spoke poorly of their past relationship with andersen don't we think that this would reflect badly on the corp? Not only that, its unprofessional. Chris |
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CJ , 09 March 2002 @ 14:01 PM
Source of consulting I suppose Freddie Mac went to Andersen with all of their consulting ideas when they were doing their audit work, and Andersen didn't suggest or recommend any of the consulting work during the course of their audit. I think not!! I seriously doubt they will take the consulting work that is suggested by PwC to Andersen. I can hardly blame any company for leaving Andersen. I wouldn't want my reputation tarnished by Andersen's unethical business practices. |
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Edward Henry , 09 March 2002 @ 04:08 AM
What loss? Lest we forget an earlier published statement by Andersen that said they would no longer do audit AND consulting work for the same client. It looks like they are living up to that commitment. Why is PwC reaping the benefits? Obviously the audit committees didn't read the article stating that PwC did work with the questionable partnerships set up by Enron. |
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Mr. Pratt , 08 March 2002 @ 20:00 PM
Eat Hey, yall know that AA has to eat too. At least they get to keep the consulting side. If one had to go which one would you have wanted to go? |
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Confused , 08 March 2002 @ 14:38 PM
Are fleeing clients hiding something? It seems strange that those clients that went with new auditors praise Andersen for the work that had been done in the past. Even more strange, these clients continue to keep Andersen as consultants,the more profitable of the two service. With the new review process and watchful eye on Andersen, could these companies that leave Andersen as clients have something to hide? |
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Someone , 08 March 2002 @ 14:37 PM
Maybe another Accenture will be born! I am looking forward to another Accenture after Andersen lost all its audit clients I am optimistic and confident about Andersen. |
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Kenneth Chin , 08 March 2002 @ 10:01 AM
Another loss Delta Airlines (no. 3) airlines has repleced Andersen as auditor --> DT. Keeping a more lucrative consulting work may not be a loss....but the loss of reputation, prestige, standing would result in greater losses in future. I'm waiting for Oracle to dump Andersen, no matter what Larry Ellison says about keeping them. |
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Ginny , 08 March 2002 @ 07:00 AM
Loss Well, they had both, now they only have one...since I am still a student and may not be too bright, maybe I am wrong, but if I had two engagements and now only have one...yes, I think it is a loss... |
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Someone , 08 March 2002 @ 01:24 AM
That's a wise and strategical adjustment for its business line. I agree!!! |
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an observer , 07 March 2002 @ 15:59 PM
this is a loss? So AA loses a loss leader audit and retains the profitable consulting. And this is considered a loss? |