PwC deal collapse raises partner concerns

NEWS It is feared US financial regulatory body the SEC is likely to rule that accountancy firms divest themselves of their consultancy operations and if so the collapse of the HP deal could not have come at a worse time. One industry analyst said: "On Wednesday, US financial regulatory body the SEC is due to announce its decision on the ongoing saga of rules governing auditor independence. In preparation for this, PwC had set up this deal with a view to capitalising assets while simultaneously divesting themselves of this potential problem. "They are now left with the failed sale of an asset with a declining market price. While the SEC decision is unlikely to demand a sale of the consultancy arm, this follows a year and a half of enormous changes in PwC following the merger of Price Waterhouse and Coopers & Lybrand. It is bound to be disappointing for both sides. "I wonder if PwC will now try to hang onto its consulting wing if the SEC allows it to." Any deal would have required consent of the PwC partners, of which there are over 10,000 worldwide. By Nik Hole