NEW YORK – Deloitte Touche Tohmatsu became the last of the five major accounting firms Tuesday to say it would separate its accounting and consulting divisions.
Deloitte had remained on the fence over the past week as the other four firms announced changes in their business practices or took other steps to quell deepening concerns over the reliability of corporate financial statements.
The concerns followed the collapse of Enron Corp. and revelations of its dubious accounting practices. Deloitte Touche Tohmatsu does business in the U.S. as Deloitte & Touche.
James E. Copeland Jr., chief executive of Deloitte Touche Tohmatsu, said in an interview that the firm made the decision "very, very reluctantly" and viewed it as a "step backwards" in many ways.
But Copeland said there was heavy pressure on the firm and its clients to separate auditing and consulting.
"Our concern is that our clients are being put in a difficult position of having to choose between their auditor of choice and their consultant of choice," Copeland said.
Copeland said the decision would be formally announced Wednesday at a global meeting of the firm's governance committee.
As recently as last week Deloitte said it would be "premature" to accept or reject any single proposal for change.
Last week the largest accounting firm, PricewaterhouseCoopers, said it had accelerated plans to spin off its own consulting unit, PwC Consulting, because of investor concerns over Enron.
Enron auditor Arthur Andersen LLP was tarnished in the scandal following revelations that it destroyed documents sought by investigators.