The Joy of Compromise: Firms Have Been Slow to Recognize
Financial Times (10/05/00) Vol. 104, No. 40 p.2; Peel, Michael

During Securities and Exchange Commission Chairman Arthur Levitt's meeting with Congress on Capitol Hill last week, the chairman showed a willingness to compromise his intended clampdown on the accounting profession. Levitt spoke fondly of the compromise plan put forth by PricewaterhouseCoopers (PwC) and Ernst & Young (E&Y), creating an opportunity for the other three "Big Five" accounting firms to come forward to settle the issue. Levitt's decision to consider the compromise plan is undoubtedly politically motivated, since it gives him two powerful allies, suddenly putting pressure on KPMG, Arthur Andersen, and Deloitte Touche Tomatsu to justify why they continue to fight something that their rivals accept. However, the three firms will certainly point out that PwC and E&Y have issued the proposal with self-interest in mind, as they will not be nearly as affected by the proposed changes as their rivals will be. E&Y has already sold its consultancy, and PwC's consultancy is in the processing of being sold.

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