Home » News » Deloitte Consulting CEO to quit

Deloitte Consulting CEO to quit

Deloitte Consulting, the consulting arm of accounting firm Deloitte Touche Tohmatsu, said on Thursday its chief executive, Douglas McCracken, would retire at the end of his term in June.

A Deloitte Consulting spokesman said the announcement, less than a week after plans for the consulting arm to be spun off were ditched, did not come as a surprise since McCracken had told the firm's partners he might relinquish his title after seeing the separation talks through to their end.

The company is looking for a replacement and expects to name a new CEO in a matter of weeks, the spokesman, Peter Horowitz, told Reuters.

McCracken, a 26-year veteran of Deloitte Consulting, leaves after a tumultuous year for the consulting firm and its accounting parent.

After steadfastly vowing to keep its audit and consulting businesses under one roof, Deloitte reluctantly agreed to split the units last year after the Enron-Andersen debacle led to legislation barring accounting firms from providing most consulting services to their clients.

Critics of accounting and consultancy under one roof argue that auditors can not independently vouch for the accuracy of a company's books after pocketing hefty fees from selling consulting services to them.

Deloitte had expected to spin off its consulting arm by the end of last year, and had delayed the plan to the end of the first quarter of this year, before abandoning it last week.

The company cited a tight credit market and economic uncertainty, exacerbated by the war in Iraq, as key reasons behind the decision.

TOUGH CONDITIONS
Consulting firms are struggling with a slump in technology spending following the end of the Internet boom and a struggling economy.

Deloitte's peers have shed their consulting arms in recent years. KPMG chose to spin off its consulting arm in an initial public offering, while PricewaterhouseCoopers abandoned plans to for an IPO for its consulting unit, opting instead to sell it to International Business Machines Corp.

The new regulatory landscape and investor jitters following a spate of accounting scandals are taking their toll on Deloitte.

Last week, Deloitte CEO Jim Copeland told Reuters the firm had “paid the price” for keeping its audit and consulting units together because consulting contracts from audit clients had all but dried up.

Earlier this year, consumer products maker Clorox Co. fired Deloitte, its auditor for 46 years, because the accounting firm had not yet completed the separation of the two units.

Leave a Reply