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Merck drops Andersen
Dow component Merck drops Arthur Andersen as auditor after 30 years.
March 1, 2002: 2:08 p.m. ET

graphic NEW YORK (CNN/Money) - Dow Jones industrial average component Merck & Co. said Friday it has decided to drop Arthur Andersen, the company's accountant since 1971.

Drugmaker Merck, the biggest name to drop Andersen so far, said after "careful consideration" it has appointed PricewaterhouseCoopers as the outside auditor for 2002.

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The company said Andersen "has provided excellent auditing" and Merck "has valued its relationship with the firm."

But Merck (MRK: up $1.38 to $62.71, Research, Estimates) noted the recent "increased attention to company practices with regard to an outside auditor" and stressed it has "applied a strict set of principles and practices designed to help maintain and ensure auditor independence."

Those practices include rotating its lead audit partner every five years and actively discouraging the use of auditors for non-audit-related purposes.

This past week, Merck's former chairman and CEO Roy Vagelos was appointed to Andersen's independent oversight board.

Earlier this month SunTrust Banks Inc. (STI: up $0.21 to $63.00, Research, Estimates) and The Hard Rock Hotel and Casino dropped Andersen, while Delta Air Lines (DAL: up $0.85 to $35.35, Research, Estimates) said it is considering the move.

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  • SEC backs Andersen offer
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    The appointment of PricewaterhouseCoopers is subject to shareholder approval. graphic

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