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Equifax, Xcel decide to change auditors

Arthur Andersen LLP was fired as auditor by Equifax Inc. and Xcel Energy Inc, increasing to 27 the number of companies in the Standard & Poor's 500 Index to do so this year.

Equifax, the largest US consumer-credit data company, hired Ernst & Young LLP to replace Andersen, while utility owner Xcel chose Deloitte & Touche LLP. Andersen, indicted on a charge of obstruction of justice for shredding documents related to its audits of Enron Corp, has been dropped by more than 80 US audit clients this year, including FedEx Corp and Sara Lee Corp.

Andersen yesterday said it will sell most non-auditing businesses and adopt former Federal Reserve Chairman Paul Volcker's rescue plan in a bid to survive the criminal charge, client defections and Enron shareholder lawsuits.

Outside the US, Andersen's plan to merge its overseas businesses with KPMG LLP is falling apart. Affiliates in Japan, China, Hong Kong, New Zealand and Russia abandoned the plan and joined other rivals. Andersen's Australian business yesterday agreed to combine with Ernst & Young.

Unless Volcker and Andersen can persuade the Justice Department to drop or settle the criminal charge, Andersen would have to win a trial that starts May 6. If found guilty, Andersen would be prohibited under Securities and Exchange Commission rules from auditing public companies in the US.
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