Andersen Worldwide

Andersen Worldwide was the Swiss-based international umbrella organization created in 1989 to coordinate two major businesses associated with the Andersen name: Arthur Andersen, the accounting, auditing, tax and advisory practice, and Andersen Consulting, the rapidly expanding management-consulting network. It was not primarily a consumer-facing brand. Instead, it functioned as a multinational professional-services structure through which the two operating organizations shared the Andersen identity and certain international arrangements while maintaining separate business activities. The structure emerged as consulting became increasingly important within Arthur Andersen. During the 1970s and 1980s, the consulting practice grew faster than the traditional audit, tax and accounting operations. Placing Arthur Andersen and Andersen Consulting into separate units under Andersen Worldwide was intended to provide a formal international framework while preserving the commercial scale and reputation of the overall network. The arrangement also reflected the increasingly different economics and cultures of audit and consulting. Audit work was governed by professional independence requirements, whereas consulting emphasized growth, technology, systems implementation and management advice. During the 1990s, tensions between the two units intensified. Andersen Consulting objected to financial transfers it was required to make to Arthur Andersen and argued that Arthur Andersen had created a competing consulting operation, Arthur Andersen Business Consulting. The dispute became one of the defining events in Andersen Worldwide's history. In 2000, International Chamber of Commerce arbitration granted Andersen Consulting independence from Arthur Andersen, required the payment of approximately $1.2 billion in past transfers to Arthur Andersen, and prohibited Andersen Consulting from continuing to use the Andersen name. Andersen Consulting consequently adopted the name Accenture on January 1, 2001. Arthur Andersen, which had obtained the right to use the Andersen Consulting name, subsequently simplified its identity to Andersen. The separation effectively removed the commercial rationale for Andersen Worldwide as a common umbrella. The organization then became associated with the collapse of the Arthur Andersen audit business rather than with an enduring international network. Arthur Andersen was severely damaged by investigations into its audits and related conduct involving Enron and other companies. It surrendered its U.S. accounting licenses and right to practice before the Securities and Exchange Commission in 2002, and its operations were dismantled. The consulting business continued independently as Accenture, while other successor businesses included Protiviti and Andersen Tax, formed from parts of the former Andersen professional-services ecosystem. Andersen Worldwide is therefore best understood as a historical organizational brand and predecessor structure, not as the surviving name of either Accenture or Arthur Andersen. Its significance lies in the attempt to manage a global professional-services network spanning audit and consulting, the governance conflict that produced the 2000 separation, and the subsequent disappearance of the shared Andersen Worldwide platform.

Andersen Worldwide was established in 1989 as a Swiss-based cooperative umbrella for Arthur Andersen and Andersen Consulting. The arrangement reflected the international expansion of Arthur Andersen's professional-services activities and the growing importance of consulting alongside audit, tax and accounting. Rather than operating as a conventional consumer brand, Andersen Worldwide provided an organizational and legal framework for businesses using the Andersen identity in different professional-services markets. The two principal units developed substantially different commercial profiles. Arthur Andersen remained centered on audit, accounting, tax and related advisory work, while Andersen Consulting expanded in management consulting, information technology and systems implementation. Although both operated under the wider Andersen name, their economic incentives and professional obligations diverged. Consulting generated rapid growth and objected to financial transfers supporting the accounting firm. It also disputed Arthur Andersen's creation of Arthur Andersen Business Consulting, which Andersen Consulting viewed as a competing operation. The disagreement continued throughout the 1990s and ultimately went to International Chamber of Commerce arbitration. In August 2000, the arbitrators granted Andersen Consulting independence from Arthur Andersen, awarded Arthur Andersen approximately $1.2 billion in past payments held in escrow, and prohibited Andersen Consulting from using the Andersen name. Andersen Consulting responded by adopting the Accenture name on January 1, 2001. Arthur Andersen, having received the right to use the Andersen Consulting name, subsequently operated under the shorter Andersen identity. The ruling removed the basis for maintaining the two businesses within a single shared umbrella. The remaining Andersen organization was then overwhelmed by the Enron crisis. Investigations examined Arthur Andersen's audit work, document-retention practices and relationships with Enron and other companies. In 2002, Arthur Andersen was convicted of obstruction of justice, surrendered its U.S. CPA licenses and its right to practice before the SEC, and rapidly wound down most of its operations. The conviction was unanimously reversed by the U.S. Supreme Court in 2005 because of errors in the jury instructions, but the ruling came after the business had effectively disappeared. The historical legacy of Andersen Worldwide is consequently divided. The consulting operation survived as Accenture, while other successor businesses were created from portions of the former Andersen network. The audit firm did not recover, and the Andersen Worldwide umbrella ceased to have a meaningful continuing role. The organization illustrates both the challenges of combining audit and consulting within one global professional-services network and the consequences of the collapse of the shared Andersen identity.

1. 2005Arthur Andersen conviction reversed

   The U.S. Supreme Court unanimously reversed Arthur Andersen's obstruction conviction because the trial jury instructions were legally insufficient, although the firm had already effectively ceased operations.

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2. 2002Shared Andersen network effectively collapses

   Arthur Andersen surrendered its U.S. accounting licenses and SEC practice rights after the Enron-related legal crisis, bringing the umbrella structure's practical significance to an end.

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3. 2001Andersen Consulting rebrands as Accenture

   The former consulting unit began operating under the Accenture name, ending its use of the Andersen identity.

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4. 2000Arbitration separates Andersen Consulting

   International Chamber of Commerce arbitration granted Andersen Consulting independence, awarded Arthur Andersen approximately $1.2 billion in past transfers, and restricted Andersen Consulting's future use of the Andersen name.

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5. 1989Andersen Worldwide structure created

   Arthur Andersen and Andersen Consulting became separate units within Andersen Worldwide Société Coopérative, a Swiss-based international umbrella organization.

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A global professional-services umbrella structure linking audit, tax, accounting and management-consulting businesses under the Andersen name.

• Arthur AndersenAudit, accounting, tax and advisory services

  The accounting and professional-services arm within the Andersen Worldwide structure. It served large corporations through auditing, accounting, tax advising and related business services. Arthur Andersen became one of the largest global accounting firms before its collapse following the Enron crisis and associated regulatory and legal consequences.

• Andersen ConsultingManagement and technology consulting

  The consulting arm of the Andersen network, focused on management consulting, information technology and systems implementation. It grew rapidly during the 1970s and 1980s, separated from Arthur Andersen through arbitration in 2000, and adopted the Accenture name in 2001.

• 2002Wind down the remaining Andersen organizationStrategy

  The Enron-related criminal case and loss of the ability to practice before the SEC made it impractical for Arthur Andersen to continue as a major U.S. audit firm.

  What changed. The firm surrendered its U.S. CPA licenses and SEC practice rights and sold or transferred much of its remaining business and personnel to other firms.

  Aftermath. Andersen Worldwide ceased to function as a meaningful international umbrella, while successor businesses survived under different names.

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• 2000Accept arbitration-based separation of Andersen ConsultingM&A

  Andersen Consulting challenged required transfers to Arthur Andersen and objected to Arthur Andersen's competing consulting activities.

  What changed. The arbitration ruling separated Andersen Consulting, awarded approximately $1.2 billion in past transfers to Arthur Andersen, and restricted Andersen Consulting's use of the Andersen name.

  Aftermath. Andersen Consulting became Accenture, while the common Andersen Worldwide framework lost its central operating purpose.

  Past transfers awarded to Arthur Andersen. $1.2 billion (2000 arbitration)

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• 1989Separate audit and consulting units under one umbrellaStrategy

  Consulting had become a major and rapidly growing part of Arthur Andersen's international business, with operating priorities increasingly distinct from audit and accounting.

  What changed. Arthur Andersen and Andersen Consulting were organized as separate units within Andersen Worldwide Société Coopérative.

  Aftermath. The arrangement preserved a shared Andersen identity but did not resolve disputes over economics, governance and competition between the two businesses.

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• 2002Enron audit and document-destruction scandalControversy

  Arthur Andersen faced investigations into its audit work for Enron and the destruction of documents and electronic records connected with the engagement. The resulting conviction, licensing consequences and loss of clients effectively destroyed the remaining Andersen organization and ended the practical role of Andersen Worldwide.

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• 2001Andersen Consulting becomes Accenture

  After gaining independence and losing the right to use the Andersen name, Andersen Consulting launched the Accenture brand on January 1, 2001.

  Leadership change
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• 2000Arbitration grants Andersen Consulting independence from Arthur Andersen

  International Chamber of Commerce arbitration separated Andersen Consulting from Arthur Andersen, awarded Arthur Andersen approximately $1.2 billion in past transfers, and barred Andersen Consulting from using the Andersen name.

  OtherM&A
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1. Arthur Andersen