AMVESCAP Fires Andersen
April 1, 2002
AMVESCAP PLC, the financial services company headquartered in London, has fired Arthur Andersen as the independent auditor for the $392 billion corporation, effective April 27. AMVESCAP is the parent company to both AIM Management of Houston and INVESCO Funds of Denver.
In a regulatory filing made on March 21, AMVESCAP disclosed that Andersen would not be seeking reappointment as auditor for the firm at AMVESCAP's annual meeting of shareholders on April 26. But the filing did not disclose the reasons for the two firms' parting of ways.
AMVESCAP did confirm that Andersen has already passed judgment on the firm's 2001 financial statements, and that there were no disagreements between the firms over any accounting principles or practices.
A spokesman for AMVESCAP conceded that characterizing AMVESCAP's separation from Andersen as a client defection, "would be an accurate description." Andersen has been serving as the independent auditor of AMVESCAP or its predecessor company since at least 1994, the spokesman said.
AMVESCAP directors have now recommended that Ernst & Young LLP become the firm's new independent audit firm. Shareholders will be allowed to vote on Ernst & Young's nomination at the annual meeting.
AMVESCAP is not the only financial services company to drop Andersen as its auditor since the Enron scandal and the U.S. Department of Justice's March 14 indictment of Andersen as a unified company. The indictment charges Andersen with obstruction of justice in willingly and knowingly destroying documents related to the auditing of Enron, after the SEC had announced a formal inquiry into Enron's financial statements and records.
Both Chicago neighbors Northern Trust Co. and the Chicago Mercantile Exchange have recently announced they would be replacing Andersen as their auditor. And last week, The Hartford Financial Services Group, the investment arm of The Hartford Life Insurance Company, announced that Andersen had not made the final cut of auditing firms that the firm began auditioning last month to serve as its 2002 auditor.
Andersen did not return a call seeking comment by press time.