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Andersen Rises from Enron Ashes TUESDAY, SEPTEMBER 2, 2014 © 2014 Dow Jones & Company, Inc. All Rights Reserved. Andersen Rises From Enron Ashes By Michael Rapoport Accounting firm Arthur Andersen collapsed more than a decade ago in the wake of the Enron Corp. scandal, but a group of former Andersen partners are convinced there's still gold in the Andersen name. A San Francisco-based tax-consulting firm run by former Andersen partners is buying the rights to the Andersen name and plans to rename the firm Andersen Tax. The move is expected to be announced Tuesday. They are betting the 12 years since the accounting firm's demise have helped wash away any taint associ- ated with Enron, and that the century-old Andersen name Journal will have connotations more Street all positive than negative to W The potential clients. for all Former Andersen w yS employees "have been going Lexe around with a scarlet letter Mark Vorsatz,aformer Arthur Andersen partner,saysatax-only Andersen firm could poseachallenge to the Big Four in the advisory business. 'A,'" says Mark Vorsatz, the former Andersen partner Mr. Vorsatz's tax firm PricewaterhouseCoopers reach $275 million to $300 leading the charge. "We're Fis changingormer its namePartner from LLP,sR Deloitteeviv LLP,eA KPMGnder millionsen in 2015. Name going to make that A stand Continuedthe lessfrom memorablepageC1 monikersee accounting LLPprofessor and, speak-Ernst & Andersen’Young sLLP.alumni “maintWTASain tax servicesis acquiring.Itwas the firm’ thesre- Services.Twenty-three Andersen ing generally and not about the a strong identification with the cent expansion outside the U.S. for Andersen." partnerWTASs, includingLLC, shortMr.Vorsatz for, WealthWTAS deal in particularMr. Vorsatz,. Critics nameWTAS'sandag chiefreat deal ofrightspride totha tptherompt Andersened the name namechange, Andersen, Enron's auditor, f&ormed TaxWT ASAdvisoryin the wake of Services.An- of Andersen executive,at the time of the arguesfor wha tithattwas ,”a saysfromDuane ArthurMr.Vorsatz Andersensaid; trademark LLP,re- dersen’scollapse. Enron scandal noted that the Kullberg, Andersen’s chief execu- strictions prevent the firm from destroyed documents after Twenty-threeThefirm is now the Andersen16th-larg- firmparthad- hadtax-onlyother problem Andersenau- tivein the firm—1980s, who saysthehe survivingusing the WT ASentityname in Eurthatope. the government began inves- estners,tax-advisor includingypractic eiMr.n the Vorsatz,ditsin addition withto Enr noneon, at com-of thestr onglyauditingsupport sMof r. Voholdsrsatz’s the“I suggremnantsested to one ofof themy U.S.,according to 2014rankings panies such as Sunbeam Corp. move. partners, ‘Whatdoyou think tigating the energy compa- frformedom Accounting WTASToday inmag thea- wakeand Wast e Managcorporateement Inc books. JeffthatDinsmor helpede,af ormerformerAn- about Andersenusing the business.name Ander- ny's accounting. That led to zineof .IAndersen'stis one of the bigg collapse.est tax- The“I’m not ggetoing tothedefend originalthe dersen Andersencolleague of Mr.VTermsorsatz sen?’of ”Tthehe dealresponse weren't,says Mr. onlyfirms, although it is far out- indefensible,” Mr.Vorsatz says and nowaclient of WTAS,says Vorsatz:“That’sapretty bold the 2002 obstruction-of-justice strippedfirm isby nowthe ta xptheractices 16th-largestof of the Enr onintoaffair .trouble—couldBut the ac- he got “pr poseetty emotional” a disclosed.when idea.” indictment and conviction thetax-advisoryBig Four accounting practicefirms— tions intha tbrcompetitiveought down Ander challenge- Mr.Vorsatz totold thehim about"Thethe partnersBut, he says, have“there’ sntotallyo name PricewaterhouseCoopers LLP, sen, he said, were the responsi- planned name change. “Ifany- that bettercaptures our values.” that doomed the firm. The Deloitthe teU.S.,LLP, KPMGaccordingLLP and tobility 2014of “a Bighandful Fourof people in .thebod yctax-advicean pull it off, it’sgembracedoing to the concept," says U.S. Supreme Court over- Ernsrankingst&Young LLPfrom. AccountingThat was notbusiness.representativ Heeo fprojectsbe Mark ,”WTAS'ssays Mr. DinsmorMr. e,Vorsatz, 59 years old, Mr.Vorsatz,WTAS’s chief ex- the rest of the firm.” nowat the MacNaughton Group, turned the conviction in 2005, ecutive,Today argmagazine.ues thatatax It-onl isy oneSt efanof Widmerglobal,a partnerrevenueat awillHonolulu be rmoreeal-estat edwhoevelop- worked at Andersen for Andersen firm—with none of the but by that time Andersen the biggest tax-only firms, than $200 million this year, 23 years. "People are genu- auditing of corporate books that "+ + " "+' had long since surrendered helpedalthoughget the itoriginal is farAndersen outstrippedWhether upsignificant from $149business millionvalue lastremains inelyin excited about. -2 #it." its licenses to practice and intbyot therouble—could tax practicesposeacom- ofthe theAndersen year,name in partis ‘a duebigg ertostretc expanh.’- Still, the move is a petitive challengeto the Big 22()!2! 22()! wound down its operations. FBigour inFourthe ta xaccounting-advice business. firms—Joseph Carcellosion,accounting internationally,professor at Universityo fTandennes see gamble. /While". +" ".Andersen ++ + +&'+ He projectsWTAS’s global reve- &+ "& + $&" " ..'+ -! -2# +" $+& ,2 -2# ' 0 1 + nue will be more than $200 mil- .+" + + 2%#))( $& +% $%% li thi f$149il (over please) The Publisher’s sale Of This rePrinT DOes not COnsTiTuTe Or imPly any endorsemenT Or sponsOrshiP Of any PrODuct, serviCe, COmPany Or OrganizaTiOn. Custom Reprints 800.843.0008 www.djreprints.com DO NOT EDIT OR ALTER REPRINT•••/ REPRODUCTIONS NOT PERMITTED 49410 had "a lot of very talented great thing" for the firm. executive in the 1980s, who selected, and the number people," whether signifi- Europeans view Enron says he strongly supports of ex-Andersen employees cant business value remains as "a U.S.-particular inci- Mr. Vorsatz's move. indicates how widespread in the Andersen name is dent," said Mr. Widmer, Jeff Dinsmore, a former they are in the finance "a bigger stretch," says who is also a former Andersen colleague of Mr. industry.) Joseph Carcello, a Univer- Andersen partner. "People Vorsatz and now a client WTAS started with a sity of Tennessee accounting were startled in Europe of WTAS, says he got focus on tax planning professor, speaking gener- that a company of that "pretty emotional" when for wealthy clients, but ally and not about the WTAS size could go down for the Mr. Vorsatz told him about the company has since deal in particular. Critics actions of a few individ - the planned name change. branched out to offer of Andersen at the time of uals." "If anybody can pull it corporate, state and local, the Enron scandal noted Mr. Vorsatz points out off, it's going to be Mark," and international tax that the firm had had other that other big accounting says Mr. Dinsmore, now at services. It was the firm's problem audits in addition firms have had major the MacNaughton Group, recent expansion outside to Enron, at companies such blowups since Enron, and a Honolulu real-estate the U.S. that prompted as Sunbeam Corp. and Waste he says the new Andersen development firm. the name change, Mr. Management Inc. "will not have any U.S. In a survey conducted "I'm not going to defend audit practice at all, ever." for WTAS of corporate Vorsatz said; trademark the indefensible," Mr. Scandal or no, Mr. executives who make tax restrictions prevent the Vorsatz says of the Enron Vorsatz says he remains decisions, large majori- firm from using the WTAS affair. But the actions that proud of the Andersen ties of the respondents— name in Europe. brought down Andersen, name and the values of many of whom were them- "I suggested to one of he said, were the respon- quality, stewardship and selves former Andersen my partners, 'What do sibility of "a handful of client service he says it employees—had favorable you think about using people. That was not stood for. opinions of Andersen, and the name Andersen?'" representative of the rest Andersen's alumni said they would be more The response, says Mr. of the firm." "maintain a strong identi- likely to work with a firm Vorsatz: "That's a pretty Stefan Widmer, a fication with the name and akin to WTAS if it changed bold idea." partner at PrimeTax, a a great deal of pride for its name to Andersen. But, he says, "there's no WTAS affiliate in Zurich, what it was," says Duane (WTAS says the respon - name that better captures said the change will be "a Kullberg, Andersen's chief dents were randomly our values." www.AndersenTax.com .
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