D&T Ends Holdout - Will Split Off Consulting
Deloitte & Touche has announced its plans for separating audit from consulting services. In so doing, it joins Andersen, KPMG, PricewaterhouseCoopers and Ernst & Young, making support for this audit reform unanimous among the Big Five.
Deloitte had told various partners of its decision to split off its consulting arm, but it is still unclear how the move will be accomplished. Deborah Harrington, a spokesperson for the firm confirmed that, “It’s too early to know what the form is going to be.” However, she said some details would be forthcoming today.
A memo sent to Deloitte staff said the options included an initial public offering, a merger with another firm or the creation of a separate consulting company owned by the partners. Another option, according to the memo, would be to create a strong “firewall” between Deloitte Consulting and Deloitte & Touche, the U.S. practice of Deloitte Touche Tohmatsu.
Last week, Deloitte Chief Executive James Copeland acknowledged that sales of consulting services by the second-biggest accounting firm have slowed amid growing concerns among clients over potential conflicts. “There certainly is some impact on our business,” he said. “A lot of people are concerned” about the appearance of conflicts.