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PricewaterhouseCoopers to split consultancy and audit

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CIOL Bureau
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LONDON: PricewaterhouseCoopers (PwC), the world's largest accounting and

consulting firm, has set July 1 as an internal deadline for the legal separation

of its consulting and audit arms, the Financial Times reported on Thursday.

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Senior partners are understood to be concerned that some staff doubt the firm

still intends to split off its consulting arm after the collapse of talks with

Hewlett Packard last year, and believe an internal legal split would demonstrate

its will to carry out the plan.

Hewlett Packard withdrew from talks to buy the consulting arm because of its

weak share price. The deal would have valued the consulting business at about

$18 billion, though the market has weakened in the interim period.

The Financial Times Web site quoted people close to the negotiations as

saying, suitors to replace Hewlett Packard had dwindled, and that senior

partners were looking instead to an initial public offering.

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PwC should be encouraged by a better-than-expected debut for rival KPMG

Consulting Inc, which was launched on Wall Street earlier this month. An

internal split is expected to bolster PwC's confidence and reverse a high rate

of departures from the firm.

Professional services firms often have to replace 20 per cent of their staff

each year but PwC's turnover at some levels has been nearer 30 per cent.

(C) Reuters Limited 2001.

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