New crisis looms for Andersen

TRANSPORT giant Stagecoach is to review the position of its auditor Arthur Andersen in the wake of the accountant's role in the Enron scandal.

Other blue-chip companies are threatening to take similar action after Andersen admitted shredding documents relating to some of its dealings with Enron.

Andersen audits the books of a number of FTSE 100 companies, including BSkyB, Cadbury Schweppes and WPP.

There is no suggestion that Stagecoach, which has had Andersen as auditor since its stock market flotation in 1993, is unhappy with its performance. But like many large companies - including CGNU, the UK's largest life insurer - it has been forced by the Enron affair to look carefully at the auditor's role.

Concerns about the dual role of accountants have been voiced by Unilever chairman Niall FitzGerald. He pledged to review the position of Unilever's auditor, PricewaterhouseCoopers, which both audits the group's accounts and works as a consultant.

FitzGerald said last week that the Enron saga raised serious questions about the role of auditors and the number of services they provide. He said: 'We will look again at the range of additional services [provided by auditors] and decide in view of current circumstances whether it is appropriate.'

Yesterday, Sir Howard Davies, chairman of the Financial Services Authority, warned that an Enron-style collapse could take place in Britain.

He said his City watchdog was considering tightening the regulations requiring companies to rotate auditors every five years.

Alternatively, the FSA could insist that auditors limit the amount of non-audit work they do for a client.

Stagecoach, which owns strike-hit South West Trains and a half-share of Virgin Trains, is not concerned that Andersen has also done work for the Government.

This work included compiling a report used by Trade Secretary Stephen Byers that helped to bolster his controversial decision to put Railtrack into administration last year.

ENRONGATE 1: The Prince who took £1m
ENRONGATE 2: The Murdoch guru who puffed Enron's businesses in Sunday Times columns
ENRONGATE 3: The BBC chairman who was an adviser to Gordon Brown...and Enron
ENRONGATE 4: The extraordinary history of the flat bought by the Chancellor from Enron‘s accountants
ENRONGATE 5: Robinson paid Labour's £500,000 bill