|
PWC favors new accounting system
|
 |
February 1, 2002: 4:20 p.m. ET
Chief of Big Five firm favors moving away from rules-based systems to principles.
By Staff Writer Kim Khan
|
NEW YORK (CNN/Money) - The top executive of PricewaterhouseCoopers said Friday the auditing profession needs to move away from rules-based accounting towards a system based on principle to avoid the kind of trouble now faced by Arthur Andersen.
PricewaterhouseCoopers CEO Sam DiPiazza, a participant at the World Economic Forum, said the Financial Accounting Standards Board needs to move away from a system where auditors can take advantage of accounting rules.
"You can follow the rules and be right by the rules and still get the wrong answer," DiPiazza said.
"People use rules to their advantage, but with principles it's a little bit harder," he said.
On Thursday PwC announced it is taking its consulting arm public to avoid the appearance of conflict of interest between the consulting and accounting arms. The company said the move also came about because of the "crisis of confidence" in the accounting profession brought about by Enron's bankruptcy.
The consulting unit being split off reported $6.67 billion in revenue in 2001 and employs 35,000 people. The arm represented a third of PriceWaterhouseCoopers' revenue and a fifth of its work force,
But DiPiazza said he would have preferred to keep the company and take advantage of the synergies between the two segments.
"We still believe that there's a lot of synergies between these businesses," he said " But there is a perception by the market that there is a conflict."
"We do not believe there is a problem," he said.
DiPiazza added he felt the standard in the accounting profession is still very high and he hopes Andersen will be able to weather the current storm.
"We'd like to see Andersen survive and pull through this," he said. 
|
|
|
|
|
|
|
