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News
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Delta grounds Andersen
No. 3 airline latest company to switch accountants in wake of Enron collapse.
March 7, 2002: 10:12 a.m. ET

graphic NEW YORK (CNN/Money) - Delta Air Lines dropped Arthur Andersen as its outside accountant, the latest company to drop the embattled firm in the wake of the Enron Corp. collapse.

Delta, the nation's No. 3 airline, said it had hired Deloitte & Touche, subject to shareholder approval. It had used Andersen as its accountant since 1949.

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The Atlanta-based airline announced in January it was weighing the change in auditors. The airline's statement did not give any reason for the change, saying only, "We value greatly the professional services provided by Arthur Andersen over the years and appreciate the excellent work provided by their Delta team."

Andersen CEO Joseph Berardino has confirmed that his company is losing business due to questions about its performance auditing Enron's books during a period of questionable accounting practices. He has also admitted in congressional testimony that the firm made mistakes in approving some moves by Enron.

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Some of those accounting practices at Enron later led to a restatement of earnings and eventually to a bankruptcy filing by the energy company.

Wednesday mortgage provider Freddie Mac, one of Andersen's largest clients, dropped Andersen for PricewaterhouseCooper. Pharmaceutical company Merck & Co., Andersen's largest client, made the same move last Friday.

This is a crucial period for Andersen in its fight to hang onto major clients. A change of outside accountants must be approved by a company's shareholders and proxy statements asking for that approval are in the process of being mailed to shareholders this month and next.

Shares of Delta (DAL: up $0.26 to $37.17, Research, Estimates) were slightly higher in trading Thursday. graphic





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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
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