‘We have always respected Andersen as a firm that has enjoyed the reputation for being focused on the market, with an excellent client base and the ability to attract quality professionals,’ the regional chairman of Ernst & Young, Ahmed al-Aiban, said in a statement on 21 May. According to the chief executive officer of Ernst & Young Middle East, Khosrow Dabir-Alai: ‘This is not a merger or an acquisition as such. Andersen will remain as an entity, perhaps until its assets are formally liquidated.’
Ernst & Young has been gradually taking over parts of the Andersen empire since the beginning of the year, after the US partnership Arthur Andersen LLPbecame mired in litigation following the collapse of the US’ Enron Corporation. The two consultancy firms have combined practices in the UK, India and Australia, and Ernst & Young has acquired several Andersen offices in the US. In mid March, Ernst & Young backed out of talks with Andersen for a global merger.
Andersen has 82 partnerships outside the US, 13 of which are in the Middle East, under the aegis of Geneva-based Andersen Worldwide SC. According to Andersen Worldwide, the company is ‘a co-ordinating entity for its autonomous member firms, which have agreed to co-operate in the market with a common brand, philosophy, technologies and practice methods’.
Andersen and Ernst & Young are the fourth and fifth largest accounting firms in the world, with revenues in 2001 of $9,200 million and $9,000 million respectively.