Pitfalls remain in closing the deals struck between Arthur Andersen partners and rival accounting firms Deloitte Touche and Pricewaterhouse Coopers, failed suitor KPMG warns.
'Very few of these deals have been completed. Though most have been initialled, we already hear and see difficulties,' KPMG international chairman Mike Rake said. 'We'll see. If our lawyers are right, there are still quite a few challenges to be faced.'
Mr Rake's comments came after KPMG failed to strike a worldwide merger deal with Andersen partners - excluding the United States - following the blow suffered to Andersen's reputation as a result of its audit of failed US energy giant Enron.
Mr Rake said KPMG's rivals appeared willing to accept levels of risk and make concessions regarding who would run merged practices that KPMG was unwilling to match.
'Rightly or wrongly, we decided to stick to our guns and we were not prepared to do a deal at any price,' he said.
The accounting profession had to deal with the massive shock to the credibility of corporate reports.
'The issue we face as accountants is that we do have a global economy but we don't have global accounting protocols, and we don't have global legal systems or regulatory systems. The latter two are extremely difficult to fix for political and other reasons, but we really do need to talk about moving to a global system of accounting protocols,' he said.
