Andersen Split has Rippling Effect

Posted by accountingweb on Aug 17 2000 112 printer friendly

Now that Andersen Consulting has made a formal split from its parent company, Arthur Andersen, some analysts are saying that the larger, Big 5 firm will suffer from separation anxiety.

What's the affect of such a split? Financially, Arthur Andersen has lost a division worth $10 billion, along with more than $200 million in profit-sharing fees each year.

But more than that, the word on the street is that the split forces Arthur Andersen to become more competitive, having been relegated to the least profitable Big 5 in terms of revenues.

One proposed path for the Big 5 firm is to increase its revenues with its finance consulting division for internal accounting matters. Most likely, nothing major will be done until a new CEO can be secured for the firm.

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