NEW YORK (CNN/Money) - Louis Salvatore, head of Arthur Andersen's New York-area regional practice, has emerged as the most likely successor to Joseph Berardino, who resigned last week as head of the troubled accounting firm's operations worldwide.

Andersen Worldwide SC, the umbrella firm that controls Andersen member firms around the world, is expected to pick a new CEO Tuesday in London. The 18 partners that make up the Worldwide board have been holding talks since last week and will discuss Berardino's successor, Andersen spokeswoman Anne Groves said.

While other names have been mentioned, Louis Salvatore is seen as the logical choice to follow Berardino, industry observers said. Salvatore served as interim Andersen Worldwide CEO for several months before Berardino assumed the position in January 2001.

"Salvatore's extremely capable," said Art Bowman, editor of Bowman's Accounting Report. "I'm surprised he didn't get the job permanently."

An Andersen spokesman said there are no front-runners for the position.

The board will also talk about Andersen's proposed merger with KPMG International, which seeks to combine both firms' non-U.S. operations, Groves said.

Andersen Worldwide Chairman Aldo Cardoso told CNN/Money last week that the board will pick Berardino's replacement Tuesday. However, the board meeting could go longer than one day and an announcement could come later than Tuesday, Groves said Monday.

Berardino, who served only 15 months as CEO of Andersen, announced his resignation on March 26 shortly before appearing on Lou Dobbs Moneyline on CNN.

Andersen, which was indicted last month for destroying Enron Corp. documents and has since seen several of its affiliates bolt to join rival firms, will likely look to a U.S. executive who is active in the firm's myriad of problems, people familiar with the situation said.

"This is not a sought-after position nor one that people are vying for," a person familiar with the situation at Andersen said.

Last Friday, Chairman Cardoso, who is also head of the French practice, told CNN/Money that he was not a candidate for the role.

"I don't think anyone outside the U.S. would want [the position]," one accounting industry source said.

The person who succeeds Berardino will find a firm near the brink of collapse. Chicago-based Andersen, once the most powerful accounting firm in the world, is struggling to overhaul its business as it fights the Justice Department's one-count criminal indictment for allegedly obstructing justice when it destroyed Enron documents.

Andersen is also the subject of several shareholder lawsuits due to its role in Enron's collapse. The firm served as Enron's auditor for 16 years before it was fired in January. Enron allegedly used off-the-book partnerships to inflate profits and hide nearly $1 billion in debt. Andersen, as Enron's auditor, signed off on Enron's financial statements.

Enron filed the largest bankruptcy in U.S. history in December.

Andersen last week said its insurance carrier would not pay a $217 million settlement to the Baptist Foundation of Arizona . The auditor reportedly missed a $100 million premium payment to a Bermuda insurance company which is now causing some to question Andersen's ability to pay damages related to Enron's collapse.

Former Federal Reserve Chairman Paul Volcker introduced Friday the new transition team at Arthur Andersen LLP, the U.S. member firm. The team, which will focus on moving Arthur Andersen to being a pure audit firm, will be led by C.E. Andrews, head of Andersen Worldwide's audit practice, and Lawrence Rieger, a senior partner.

Since the March 14 indictment, Andersen has lost several clients, including Sara Lee Corp. and Abbott Laboratories. The accounting firm has also encountered difficulties in completing a pending merger with KPMG International. Andersen's Australia operation broke ranks last week and joined rival Ernst & Young. So far Ernst has scored three Andersen firms.

Press reports said Monday that Andersen's Middle East unit had also decided to bolt and was planning to merge with PricewaterhouseCoopers, the world's largest accounting firm.

Andersen declined comment. PwC could not be reached for comment.

With all these problems, some believe Andersen will look to an executive with proven leadership, such as Richard Measelle, who served as Andersen's CEO from 1989 to 1997, to fill Berardino's spot.

"Measelle did the job before and did it very well," the accounting industry source said.

But Measelle insists that he is not the right person for the job. "I am not a candidate," Measelle told CNN/Money. "The solution has to come from the current generation of partners."

Measelle has been working behind the scenes and encouraging Andersen partners to fight the Justice Department's indictment, a separate source familiar with the situation at Andersen said.

Measelle himself pointed to Louis Salvatore as the top choice to succceed Berardino.

Still others believe that James Edwards, a top Andersen partner and former managing partner of the Southeast region, could be vying for the role. Edwards wanted to be CEO after James Wadia, Andersen CEO from September 1997 to August 2000, stepped down.

"Edwards wanted to follow Wadia and has been on the fast track for quite a while," said Art Bowman.