Deloitte Touche has abandoned plans to separate its
consulting and accountancy practices.Parent group Deloitte Touche Tohmatsu blamed
the tight credit market and economic uncertainty for the u-turn on
the plans, which were announced last year.
“We gave this our very best efforts, but
concluded, with advice from our outside legal and financial
advisors, that it is just not prudent to complete this transaction
in this environment,” said James Copeland, chief executive officer
of Deloitte Touche Tohmatsu.
“We began this process at a time of more
robust consulting, capital and credit markets – all of which have
deteriorated in the past 14 months."
The aftermath of the Enron and WorldCom
scandals in the US has produced strong pressure on firms to
separate auditing and consulting arms. Deloitte Consulting said
that its consulting arm would continue to provide a broad set of
professional services, "principally focused on nonaudit
clients".
Analyst firm Ovum Holway said, restricting
Deloitte Consulting to non-audit clients is "a huge blow for a firm
that had hoped to capitalize on existing client relationships".
It described the decision to pull the
separation as "an embarrassing volte-face for the firm, which had
made a convincing case for separation - ie being a truly
independent private consulting firm, free from its auditor parent
and shareholder pressure and technology agnostic".