Andersen Grounded by Delta

Big Five firm Andersen continues adding clients to the loss column with Thursday's announcement that Delta, the third-ranked U.S. air carrier, is dropping Andersen as its auditor after a relationship of 50 years.

Deloitte & Touche has been selected as Delta's new independent accountant for 2002 after what the company is calling a "thorough evaluation process" in which four of the five Big Five firms were considered for the job. PricewaterhouseCoopers did not bid on the job. Delta shareholders will vote on the decision at their April 26 shareholders meeting.

Andersen's fees from Delta for the year 2000 were $1.9 million for audit services and $4 million for consulting and other services. According to Delta spokeswoman Catherine Stengel, Andersen will continue to perform some tax and other consulting services for Delta.

Delta released a statement after the decision was announced in which Andersen was given a perfunctory commendation. "We value greatly the professional services provided by Arthur Andersen over the years and appreciate the excellent work provided by their Delta team." Similar statements have accompanied other recent defections of Andersen clients. Andersen has lost 34 clients since the beginning of the year, according to a Reuters report, including Freddie Mac, Merck, SunTrust, and Enron.

Further adding to Andersen's woes is FedEx as well as Riggs Bank, who both announced on Monday March 11 that they were dropping Andersen and going with another Big Five firm as an auditor next year.


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