1. The Arthur Andersen Story

The history of Arthur Andersen rests on the deep values in which its founder was educated and springs from that strong basis.

Arthur E. Andersen: the founder

The Firm’s founder, Arthur Edward Andersen, was born in 1885 in the young nation of the United States of America, in the state of Illinois, in the small farming town of Plano, 55 miles southwest of the great city of Chicago.

His parents were immigrants. His father was Norwegian and his mother Danish. They had 8 children, Arthur was fourth, and the parents died, respectively, when he was 11 years old (his mother, Mary, at 38) and 16 years old (his father, John, at 44). Till that moment, Arthur had lived in Plano, where he was born, and in Oslo, where his parents took refuge because of difficult conditions in America, only to return to Plano and remain finally in the US.

The premature death of his parents forced young Arthur to combine work as a mail-boy, at the foundry where his father worked, Fraser&Chalmers, with attending night secondary school, thanks to his employer William Chalmers’ support. When his parents died, the family was already living in Chicago, on 628 Ohio Street. Arthur was the eldest son among those still living at home, so he had to take care (at the age of 16!) of his four youngest brothers.

His education was built on the social and cultural circumstances on which he grew up: a life based on personal effort, work, discipline (self-discipline mainly), support to other members of the community, frankness and honesty. All of them virtues that flourished in the small immigrant community in which he grew up.

In 1906, when 21 years old, he was promoted to assistant to the controller at Fraser&Chalmers and continued studying in the evenings, something he kept on doing for many years in his appetite for learning and moving forward. Furthermore, on that year he married Emma Barnes Arnold.

In 1907 he left his secure and well-paid job with Fraser&Chalmers, to his wife’s dismay, and accepted a temporary staff position, earning less than before, in the Chicago office of the centenary and distinguished British accounting firm, PriceWaterhouse.

In 1908, just 23 years old, graduated as Bachelor in Business Administration, becoming the youngest CPA in the State of Illinois.

We can imagine young Andersen at 23, ready to take on the world with his brand-new degree and the immense possibilities augured by the turn of the century. The XX Century had just begun and everything was waiting to be done!

Andersen was not content with just being an accountant. He immediately registered for the evening course in the freshly opened School of Commerce of Northwestern University in Chicago.

On the following year, 1909, at 24, the University invited him to teach some lessons to the first year pupils of the evening course. At that time he was combining his job, the studies he was taking and the classes he imparted.

In 1911, at 26, he left Price and signed up as controller for the family group Uihlein, owner of the Schlitz brewery and other business firms. That made him move to Milwaukee, 180 miles away from the University, in which he kept studying and teaching.

In 1912 he was asked to lead the Accounting Department at the University and he accepted.

In 1913, at 28, he left Uihlein and concentrated on the University, beginning at the same time to act as consultant in some interesting projects such as a first valuation of Ford, still a family business at that time.

Soon after, on 1st December 1913, barely 29 years old, he opened his own firm, offering accounting, auditing and consulting services, on 20th floor of the Harris Trust Building, 111 West Monroe Street, in the heart of Chicago, together with his partner Clarence DeLany (an exPrice too), after acquiring for $4,000 The Audit Company of Illinois and renaming it Andersen, DeLany & Co.

They started with the small office in Chicago, consisting of the two partners, 7 professionals and 1 “do-it-all” secretary, and in 1915 opened their second office in Milwaukee.

For Arthur Andersen, who was already acting as independent consultant, it was a way of keeping at the same kind of work, but doing it under a firm’s umbrella.

The visiting card of the new Firm indicated specifically the five professional practice areas in which it wished to develop (literally quoted):

1. Periodical audits, including the preparation of balance sheets and statements of profits and analysis and interpretation thereof.
2. The certification of financial statements for publication or for presentation to bankers in support for applications for loans.
3. Investigations for special purposes, such as to determine the advisability of investment in a new enterprise or the extension of an old business.
4. The designing and installing of new systems of financial and cost accounting and organization, or the modernizing of existing systems.
5. The preparation of reports under the Federal Income tax law.

We can see how Andersen was thinking in the consulting activity (points 3 and 4 above) since the foundation. That is going to mark the Firm all along its life and, somehow, to make it different.

In 1918 DeLany friendly left the Firm and then the name changed to the one that would last for decades: Arthur Andersen & Co. At the time, Andersen was 33 years old.

DeLany’s departure was covered one year later by a new partner, David Himmelblau, that had joined in 1913 and would later leave the Firm in a rude manner, carrying some clients with him, in a similar episode to the one so many times repeated in so many professional services companies all over the world.

Young Arthur had kept studying in the evenings until he graduated in 1917 as Bachelor in Business in the renamed Kellogg School of Northwestern University. To his accounting studies he added this way an interesting general education in business management and administration, showing already his desire to extend the activity scope of his Firm beyond the accounting and auditing areas.

From his 27 to his 37 years of age, he was head of the Accounting Department of the School of Commerce in the aforementioned Northwestern University. He was the first teacher that made the proposal to go beyond strict accounting in the auditors training, trying to have them learn to understand and solve general business problems. In 1917 he wrote a Complete Accounting Course, published by Ronald Press.

Andersen believed that the auditor’s role should be approached in a new way, carrying it beyond mere accounting and giving it an orientation towards business improvement consultancy. To do that the first requirement was to train the new professionals. In sum, he helped to renew and recreate the profession, giving it more content and, in the end, a higher value.

His bid for education begun with fresh young graduates with the best records that he recruited at the universities, but he went on as the first to understand that the professionals needed to be kept in continuous training at all levels. That is the reason he disposed part of his employees’ time for training and created the first training program of an auditing firm. Andersen was a pioneer in discovering that training was a necessary investment, not an expense. And all that, as we will see, in the 1920s, when the entrepreneurial environment in the rest of the world either did not exist or was using other much older parameters.

Arthur Andersen was thus a pioneer and a visionary in many aspects of the auditing and consulting profession. After him, others followed, and these ideas and methods lost later their pioneering character becoming the standard everybody followed, most without asking who had the initial idea. But it all begun in the brilliant mind of Andersen’s founder.

His activity and innovative ideas provided him with great professional prestige throughout the United States, what brought an important expansion of the Firm in the whole country in the happy and expansive 20s.

These were the first years in the use of management accounting in the US, and Andersen was one of the strongest advocates from the beginning. But companies initially resisted the idea of making their accounting statements public.

The new Firm was born in an environment of great professional firms already established in the United States, most of them coming from Great Britain, having followed that country’s colonial and entrepreneurial development during the second half of the XIX century and most of them founded at that time. We refer to firms like Price Waterhouse (today PWC after the merger with Coopers&Lybrand), Marwick, Mitchell&Co (later Peat Marwick and today KPMG), Hasking and Sells (later Deloitte, Haskins and Sells and today Deloitte), Arthur Young (today Ernst &Young after merging with Ernst & Whinney) or Touch & Niven (today part of Deloitte). The last two firms were also founded at the beginning of the XX century in Chicago itself.

But Andersen differed from the beginning from the others, because it was born as a business consulting Firm rather than a mere auditing company, emphasizing concepts so rare at that time (and even now for some) as business orientation or creativity.

Arthur Andersen saw clearly the market niche, a position that made it different because no competitor saw it that way. The auditing firms at that time were fiefs of boring accountants, where business orientation or creativity talk was just short of blasphemy.

Arthur Andersen was a “multidimensional” character, a born worker and a nonconformist. And he tried to instill those attitudes in his Firm. From the beginning he encouraged his professionals to speak up clearly, in and out of the Firm, and to speak clearly to the clients. That earned him a certain and deserved reputation as an iconoclast. Andersen was a breath of fresh air for some and a nuisance for others, because he questioned all the standards; he took nothing for granted. In other words, the Firm’s first steps were somewhat anti-establishment (though always orderly).

Furthermore, Andersen was by far the youngest of the great firms’ bosses at that time.

The Firm’s DNA showed up in the first years, when it won as clients diverse companies that became later household names and continued as Andersen’s clients almost for life, such as Colgate-Palmolive or The Parker Pen Company.

The essence of that DNA, that we will develop in detail in subsequent chapters, was already there in Arthur E. Andersen’s mind and in his daily professional attitude; for instance, service to the client at any cost, before anything else, even personal interests, attending any client’s need at any time; or the emphasis on training, coming from an academic teacher as Andersen himself, that made of education a high priority and valued asset for his Firm.

From the creation of Andersen, DeLany & Co. at the end of 1913, until the first 20s, Arthur Andersen&Co. grew strongly, driven by the booming American economy as a consequence of the growth linked to World War I, with the USA as supplier to the allied cause. Unemployment fully disappeared in those years. Furthermore, some legal rules, such as the regulation imposed to companies to present audited accounts in 1914 for any loan demand from banks belonging to the Federal Reserve, expanded still more the auditing market.

The development of the emerging American world power in the 20s accelerated with moves to modernize its economy, helping it to become the biggest economic power on earth, a position still maintained today.

The Firm’s turnover went from $67,700 in 1916 to $322,000 in 1920, with two offices and 54 employees. Not all in these figures came from auditing fees since there were also fees for preparation of tax filings and, even from the beginning, fees for consultancy and new systems implementation.

The 20s were a golden age, but they started in the USA with a crisis, especially centered on agriculture, and finished with another, more serious, one, 1929, that started in the stock exchange and spread later to the whole American economy.

In 1921 the Firm opened its first New York office, at 17 E 42nd Street, and moved later to 67 Wall Street. In subsequent years it extended throughout the whole country.

In 1922 Arthur left the classes at the University to dedicate full time to the Firm. He also made the donation to Northwestern University of the author’s rights on his Complete Accounting Course.

In 1925 the Firm had already 7 partners, Arthur E. Andersen being the main one with 57.375 %. The second one in participation was his brother Walter, with 12 %. From the beginning the design was that of a society of professionals, a partnership, in which the partners shared the profits in accordance with consensus agreed yearly quotas, depending on seniority and the role played by each member in his contribution to the company. From the beginning the partners earned a very good living.

From 1925 is the reference to an Arthur Andersen speech to the American Institute of CPAs in which he said:

“The time when the accountant was viewed by businessmen as a necessary evil is not entirely past. Yet... in the last decade businessmen have learned that the accountant is more than a compiler of figures and a detector of defalcations... The businessman has found that advice from an accounting viewpoint may have a high cash value in the form of taxes saved or refunded, war contracts liquidated [and] in recapitalizations and refinancings effected advantageously...”

“In filling the function of advisor or consultant to management, the accountant is thus entering fields of investigative work which mark a distinctive advance over the earlier conceptions of the scope of his service and which deal with the broad aspects of business as a whole.”

“It is in bringing a balanced view to bear upon the problems of the undertaking and in assisting management in matters of business analysis that the accountant will have his geatest opportunities for service.”

His words show again his clear position in defense of a wider role for the auditor, whom he sees at the same time as a consultant, in defense of a broader view of the clients businesses. And of an enrichment of the profession, we would add.

Not all competitors had the same view at the beginning. But his position became dominant in the end, not without controversy around this theme, even to the present day.

In the 20s, the Firm kept also developing, although with ups and downs, the practice of systems consulting, which was called at the beginning industrial engineering. Arthur Andersen supported it in spite of its initial problems. It was for him an essential part of the Firm he had in mind.

At that time he invested in education, creating the first training program for his employees, which allowed for a higher uniformity in the auditing procedures. In parallel with that he created a Technical Committee charged with defining action standards in auditing work. He also encouraged the partners’ presence in universities in order to recruit the best.

The approach was simple and systemic: recruit the best, train them thoroughly in-house so that they will act in a professional and homogeneous manner (“one firm, one voice”) according to the highest standards, and knowing how to add a drop of creativity and professional advice, so that the clients would receive the best possible service, beyond just the mere certification of their accounting statements.

At the end of the 20s the Firm had 7 partners, over 400 employees, 7 offices and a turnover above two million dollars.

After the 1929 crisis, the 30s came as a dark decade. Andersen’s clients had problems, as most of the US companies did. Andersen supported them as much as it could and the Firm and most of its clients were able to come reinforced out of that first crisis, and with higher prestige.

Towards the end of 30s, the creditor banks entrusted the Firm with the task of clarification and control of the Samuel Insull bankruptcy, a financial holding who collapsed as fast as it had climbed to the top. The Insull affaire was a springboard for Arthur Andersen&Co. Something similar to what the Rumasa intervention meant in Spain for the Firm.

In 1937 a consultancy division was created to service small and medium sized companies. In the 25 years that went from 1913, foundation, to 1938, the Firm grew in size and reputation more than any other. As time went by, it had more partners, employees and offices, and extended throughout the US.

Arthur Andersen kept the position as main partner and kept managing the Firm until his death in 1947, at 61. On that year the Firm had around 1,000 employees, spread through diverse offices in the US.

At his death, as already established, his quota in the society would dilute into the other partners, leaving thus room for the integration of young partners, a system that Andersen as a Firm would not abandon until the separation of Arthur Andersen and Andersen Consulting, when Andersen Consulting changed it as it went public under the new Accenture name, and Arthur Andersen kept it under the Andersen name, until its dissolution.

Arthur Andersen did not just leave his name to the Firm he founded, but gave it his values and his character too. He passed them on to his Firm and to the whole auditing and consultancy profession, marked forever by his figure and his values. He was the first to defend that auditors had a responsibility towards the shareholders as investors, prior to their responsibility to the executives that were their clients. And so he inculcated this in all his partners and all professionals that worked at his Firm.

But Andersen, as we shall see, lacked an important virtue: that of rightly choosing his own successors. That deficiency all but finished down the Firm in 1947.

The founder’s successors

The Firm was lucky that the professionals that were appointed partners in those early years included some of the more intelligent and visionary individuals given by the consultancy and auditing profession along its whole history.

But perhaps it was not just a matter of luck. Andersen had been a pioneer in paying his employees more than the other firms and in recruiting the best at the university gates. Furthermore, he did it offering a working approach not limited to account checking but combining auditing and consultancy, a proposal that was much more attractive than those of the competitors.

On the other hand, Arthur Andersen was a very proud person and had quite a few obsessions. Among those, for instance, he was an extreme perfectionist and had an almost sick concept of loyalty. He was, we could say, a bit pedantic, and grumpy too. In fact, because of his excess of an ego, his problems with his more prominent partners were customary, as shown by what happened with the two first partners in the tax advice field: his brother Walter Andersen and Edwin Evans. He quarreled with both and they left the Firm in the end.

More serious was the John Jirgal’s fall. Arthur Andersen named him as his first successor, but later dethroned him when his ego was threatened by the reputation won by Jirgal with the Insull case during the 30s.

The next heir was Paul Grady, a great professional that joined the Navy in 1942 as head of the cost inspection service, and after some disagreements with Arthur, finished his career with PriceWaterhouse.

Even if it seems surprising from the present perspective, Andersen considered the option of his son Arthur as successor, an option he first caressed with pleasure, but then vanished when Arthur Jr. left the Firm in 1943. Arthur Jr. had been a special partner, that had passed through the Firm as the “old man’s son”, with quite a few privileges, that did not though prevent a positive mark on his path, having helped develop policies and procedures that lasted a long time. Arthur Jr., however, never was truly interested by the Firm. His interests were more in country life.

The “old man” suffered at not having his son as successor. The truth is that, in depth, the founder treated the Firm as his particular family fief instead of a professional society owned by several partners. As can be imagined, the other partners were not happy about that; especially the most senior ones.

After the departure of Arthur Jr., Andersen restarted the heir designation process. But, unfortunately, as we have explained, he died only four years after that, at 61, in 1947.

From the founder’s death, Leonard Spacek took the Firm’s reins. Spacek did not just give continuity to the founder’s work, succeeding on the not easy job of preventing that his absence would damage the business, but gave new power to the Firm and contributed his own personality.

But Spacek arrival to the top position of Arthur Andersen&Co. “post-Arthur Andersen” was not straightforward.

A few days after Andersen’s death, the partners met and decided to liquidate the Firm. The confrontation between the New York and Chicago offices was behind this decision.

It was only the integrating work done by the couple formed by Grant Chandler, a veteran partner in the Firm since its foundation, and Leonard Spacek, a young and almost unknown partner, “just” 39, what made possible the Firm’s continuity, the partners’ approval and the retention of faithful clients regardless of the fact that some of them felt closer to “Arthur Andersen as a person” that to the “Arthur Andersen Firm”.

It was probably then that a true rebirth took place, an absolute renaissance of the Firm.Perhaps its birth as true Firm. Free from the asset, and partial liability in some respects, of the founder’s presence.

Although getting rid of the founder was not easy. The partners had to indemnify the family and this had to be done through several years. They also had to convince Arthur Andersen Jr., who initially tried to assume his father’s role, claiming his right to inherit the Firm. Those were not easy moments.

Once the questions with the Andersen family were cleared up, it was necessary to choose a leader.

Leonard Spacek

Spacek raised the Firm to a higher level. It can be said that Spacek was really the one who made Arthur Andersen great.

Leonard Spacek joined Arthur Andersen&Co. in 1928, at 21, as a junior auditor. He was promoted to partner in 1940 when he was 33.

His appointment as leader of the Firm followed a winding path. In fact, the partners named a seven partners Committee, having as Chairman and Vice Chairman, respectively the managing partners of the New York and Chicago offices, P.K.Knight and Charles W. Jones.

Spacek was named “administrative partner “, an ambiguous enough position for him to begin de facto acting as Managing Partner. In fact, the partners approved in 1949 the change of Spacek`s position to that of Managing Partner.

Spacek assumed the Firm’s leading office from 1947 to 1963, but he continued in prominent positions until 1973, the year of his retirement. He thus commanded the Firm all through the decisive 50s decade and further on.

Spacek was the bridge that allowed Arthur Andersen&Co. to pass from being a personality based quasi-familiar Firm, relatively small and focused on auditing and tax advice, to being a Firm with its own identity, owned by its partners through a wide and stable partnership structure, professionally managed, multinational, strong on consultancy and information systems, where it assumed a pioneering position and world leadership. A much stronger Firm, known and admired all over the world.

The first sign of Spacek’s vision was his decided bid for the incipient “computers”. While some in and out the Firm derided and scorned the new “calculation machines”, Spacek glimpsed how they would become decisive in the business world and in entrepreneurial accounting. Spacek strongly supported a new and powerful Systems Group that had been created one year before Andersen’s death with top-grade specialist coming from IBM.

In the first post-founder years, Spacek had to sell the market on the idea that Arthur Andersen&Co. did not just offered the assurance of serious and professional work of a single man, but that of a whole team, a culture, a system, in sum, a Firm. It was not an easy job. He also had to deny all kind of rumors, such as the Firm’s liquidation or its acquisition by somebody else.

Spacek was able to cope with all the difficulties, and the situation had the positive effect of keeping the partners united in the face of adversity. On overcoming that stage, the Firm emerged stronger.

Spacek had discussed much with Andersen, differing in many things, but coinciding in what was essential: the Firm had to provide additional value to its clients, a service going beyond mere auditing work.

Spacek, like Arthur Andersen, was a resolute and direct man, perhaps even autocratic; but he was a great executive. Just what Andersen needed at that time.

With Spacek, the consultancy and systems practice began to take off in force. He described himself as a consultant, closely related to systems. This was one of the points where he diverged with Arthur Andersen, who defined himself as a consultant, but closer to accounting and auditing than to systems. In fact, Andersen was always wary about what he used to call, disdainfully, “technical”.

At the end of the 40s, when Spacek reached the Firm’s summit, it was organized in three practice types: auditing, tax advice and systems. The latter, even if not fully matured, made a neat difference from the other auditing firms.

On the 50s, strong investments were done in three directions:

• more offices in the USA
• creation of new offices or local firms acquisitions in several countries
• development and consolidation of the consultancy and systems practice

The three practices developed with force in that extraordinary decade. Always under the baton of the equally extraordinary Spacek, decided to grow as much as needed to rub shoulders with the incumbent great firms.

The partners accepted this, but not without some confrontation, because he demanded from all an exercise of generosity in sacrificing short term earnings in exchange for the Firm’s long term development. There is no doubt that the 50s partners invested part of their profits in the Firm’s future.

In those years, Spacek persuaded the partners to accept that the Firm did not belong to them, but that the partners on each generation had to be a sort of usufructuaries and guardians (stewards) of the Firm. The duty of the partners was to leave to the next generation a better Firm than the one they received. The partnership model was also consolidated: each partner had one vote, regardless of his seniority or his position in the Firm’s structure; decisions on partnership matters would be taken by direct vote at the partners meetings. It was a totally democratic governance structure.

SSpacek was a pragmatic man and extended his pragmatism to the Firm. His are the following words: ”There is no progress by accepting things just because they have always been made that way; you should look for the best way they can be done now”.

An example of that philosophy turned into practice was the way Andersen opened offices out of the USA. Instead of following one of the two models used by the other firms: by alliances with local firms or by sending expatriates to the foreign offices, Andersen opted for opening offices with its own personnel and having that personnel made of local people from that country, reducing American personnel to a minimum as fast as possible. This strategy, as we shall see, gave extraordinary results and was the key to the Firm’s worldwide success.

The international expansion went with a unity philosophy (one firm, one voice). Spacek looked for a symbol of that unity. Although it was not easy, he finally found it when coming out of an elevator and looking at his own office’s doors. Spacek institutionalized the doors as that unity’s symbol. At the beginning of the 50s, on a frantic new offices opening program, the Andersen doors were installed throughout all offices in the world and were the symbol of that unity. Spacek used to say: “To me they represent confidentiality, privacy, security, orderliness... And these thoughts epitomized the common vision I want all our people to share.”

It should be recognized that Spacek had a great idea over the doors. For many they will continue forever as the Arthur Andersen’s symbol. In fact, the Firm, at the time of Andersen Consulting’s split, adopted a different sign (a kind of sphere or blob) that was used until its collapse.

In 1947, when Spacek took the helm, the Firm’s turnover was 6.5 million dollars, had 26 partners and 826 employees. In 1956 the figures had grown substantially: turnover was 18 million dollars, with 85 partners and 1,826 employees. Business was concentrated in the USA.

In 1970, when Spacek left the management positions in the Firm, turnover had climbed to 190 million dollars, with 689 partners and 8,933 employees, in 26 countries.

The subsequent leaders

Beyond Arthur Andersen and Leonard Spacek, we could say that subsequent leaders, although great professionals, limited themselves to administer the legacy of those we could call “the two founders”.

Spacek was succeeded by Walter Oliphant, on the partners’ choice. It was on 1st December 1963, coinciding with the Firm’s fiftieth anniversary. Spacek took a newly created position: Chairman of the Partnership. As a token of respect for the Firm’s governance model, Spacek did not appoint Oliphant, but limited himself to a recommendation, on the basis of his differential qualities in respect of the rest of the Firm’s partners at the time.

In reality, Spacek, aged 56, kept representing personal power in the Firm. In 1970, both Spacek and Oliphant left their offices at the same time, so Oliphant was throughout his whole mandate under the legendary Spacek’s shadow. The coexistence led to Oliphant being busy on internal matters and Spacek giving the external Firm’s presence.

In any case, the change in style from Spacek, the bulldog, to the subtle Oliphant could be noticed.

Oliphant lived through growth years in the USA and in the rest of the world, on the wave of the development of the auditing profession and the accounting principles. Those were too investment years on the international practices. On this, Oliphant recognized years later that until 1970 international practice did not become profitable.

In 1970, Harvey Kapnick replaced Walter Oliphant, joining this role and that of Spacek, with the title of Chairman and CEO.

On that year, the Firm acquired, for 4 million dollars, St. Dominic College in St Charles, Illinois, and founded its own “Permanent Centre for Professional Development”. Thousands of Arthurs went through the Centre along the Firm’s history.

In 1980 Duane Kullberg was elected as CEO and Paul LeBlanc as Chairman of the Board of Partners.

The managing partners in the last years

In 1987 Lawrence (Larry) Weinbach was chosen as Managing Partner (Chief Operating Partner of the Worldwide Organization).

In those years, the consultancy practice was growing in force, on two digit ratios. In the Firm, it represented already 40 % of the total fees. The partners in consultancy began asking for a larger role in the Firm’s governance and a higher proportion of the results.

A decision on the matter could not be postponed and in 1988 it was decided to give the name of Andersen Consulting to the consultancy practice and to split the organization, globally, in two independent units: Arthur Andersen, consisting of the auditing, tax advice and financial advice practices and Andersen Consulting, with general consultancy, mainly systems related.

Time would show how decisively important this decision was for the Firm’s survival.

No doubt that an influence in the decision came from the fact that an offer to purchase the consulting division had been received in July 1987 from the British communication and advertising firm Saatchi&Saatchi. Heading the offer was an ex-partner, Victor Millar.

At the beginning of fiscal 1989, the Firm had 231 offices throughout the world, 82 of them in the US. In 1988 the fee volume reached 2,820 million dollars, with 2,016 partners and 45,918 employees.

From that moment on, the Firm was managed on three levels: one global managing partner and two managing partners in charge of each one of the two “sub-firms” formed around the Arthur Andersen practice and the Andersen Consulting practice.

A partners meeting held at the end of 1989 in Dallas, Texas, certified the organizational and results separation, what de facto meant the creation of two business units: Arthur Andersen and Andersen Consulting. It was the beginning of the end of the Firm as imagined by the vision of the founders Arthur Andersen and Leonard Spacek.

We could say that then began a transition stage that finished eleven years later, in 2000, when the two sub-firms formally split with the publication of the award taken by the Colombian Guillermo Gamba-Posada in the arbitration process initiated by Andersen Consulting.

From that moment on, Arthur Andersen on his side followed a lonely path, changing in the same 2000 its name to Andersen, only to end disintegrating soon afterwards, in 2002, as the consequence of the unfortunate Enron affaire. Andersen Consulting, on his side, changed its name to Accenture in 2001, modifying its formal structure and going public in the stock exchange, to later follow a successful path of development and growth to the present time.