Deloitte Touche Tohmatsu, the world's No. 2 accounting firm, said on Saturday its board of directors named William Parrett, from its U.S. unit, as its new global chief executive officer.
Parrett, managing partner of Deloitte & Touche LLP, the company's U.S. unit, and Deloitte's Americas practice, would take over at a tumultuous time for the accounting industry, which has been battered by scandals involving bankrupt energy company Enron Corp. and other companies.
In an interview from his Connecticut home, Parrett said: “At the end of the day, the investing public has to be able to rely on the information it receives from the companies, and have a better understanding of the role of the auditor.
“It may very well be that as a profession, we will be required to do even more by the investing public than we are doing today,” he added. “I am confident we will be able to meet this challenge over a period of time.”
The 36-year Deloitte veteran would replace James Copeland, who resisted changes in the industry following the scandals.
Copeland plans to retire at the end of May when his contract expires to spend more time with his family.
Deloitte voted to promote Parrett on Thursday and said his nomination is subject to approval by various units. That process should end in April, it said.
Parrett, 57, joined Deloitte in 1967 and became a partner in 1977. The company booked about $12.5 billion in revenue for the year ending last May 31, second in the accounting industry to PriceWaterhouseCoopers.
INDUSTRY'S INTEGRITY QUESTIONED
Parrett said he intends to focus on improving global accounting and auditing standards, which vary by country.
He said he also wants to bolster corporate responsibility and accountability to help restore trust in global capital markets. Scandals over the last two years called the accounting industry's integrity into question and led to the demise of one major firm, Andersen, which was Enron's auditor.
“There have been some well-publicized corporate failures, either because of failed business models, overplaced exuberance or turns in the economy,” said Parrett.
While “on balance, auditors can always do a better job,” he said, “by and large the industry has measured up pretty well against its corporate responsibilities.”
Copeland emerged after Enron collapsed as a strong opponent of wholesale change to the accounting industry, arguing against efforts to split the accounting and consulting functions at each company — seen as a means of assuring auditors' independence.
Deloitte eventually became the last of the now Big Four accounting firms to agree to split those functions. “We're hoping to get that completed in the next couple of weeks,” Parrett said.
The company was named in U.S. Congressional hearings on Thursday as one of the advisers that helped Enron achieve more than $2 billion of questionable tax savings between 1995 and 2001.
It was also sued in November by bankrupt cable TV operator Adelphia Communications Corp. ADELQ.PK , which accused its former auditor of negligence and fraud for failing to stop former top Adelphia executives from pillaging the company.
Deloitte employs more than 100,000 people, and is absorbing about 26,000 former Andersen employees.