Andersen's RI unit merges with Ernst & Young
The Jakarta Post, Jakarta
The Indonesian unit of troubled accounting giant Arthur Andersen, called Prasetio Utomo-Andersen Indonesia, has finally merged its operation on Thursday with the Indonesian affiliate of Ernst & Young.
The merger was held to combine the strengths of both companies as well as to provide certainty for Arthur Andersen's clients following the Enron scandal in the United States, which dragged the reputation of the accounting firm worldwide through the mud.
"(Through the merger) we will bring the strengths of both firms together to be stronger than the sum of our parts," said a statement released to the press on Thursday, following the merger announcement.
The merger followed months of talks, during which the troubled firm also approached PricewaterhouseCoopers (PwC), and Deloitte Touche Tohmatsu (DTT).
Ernst & Young was finally available for merger with the Arthur Andersen unit.
After the merger, the new firm will be known as Ernst and Young Prasetio, Sarwoko, Utomo and Sandjaja.
John Prasetio, formerly from Andersen, will be the firm's chairman. Simon Halim from Ernst and Young will retain his position as the chief executive officer of the new firm.
The move by the Indonesian unit of Andersen followed similar actions by other Andersen affiliates worldwide, which had been seeking mergers with other firms, as the reputation of Andersen's headquarters in Washington was ruined following its involvement in the Enron scandal.
U.S.-based Andersen, which audited Enron's financial reports, was convicted last week by a jury for the obstruction of a government inquiry into the firm which announced its bankruptcy late last year amid reports of irregularities in its financial reports.
Andersen affiliates in Singapore, New Zealand and Australia have signed deals to merge their operations with Ernst and Young.
Associated Press reported that Andersen headquarters in Washington had lost more than 100 public audit clients so far this year, following the Enron scandal.