“Four of the five biggest accounting firms said yesterday that they would reject the industry practices that have prompted extensive criticism of Arthur Andersen, which audited financial statements of the Enron Corporation, writes Jonathan Glater in today’s New York Times.

“PricewaterhouseCoopers and Andersen said that they would no longer provide certain technology consulting services to clients whose books they audit and would stop providing internal and external audit functions at the same company. Ernst & Young and KPMG, which have shed their consulting businesses, said they would support the same measures, which are intended to avoid perceived conflicts of interest.”

“The remaining big firm is Deloitte & Touche, which has repeatedly stated its intention to keep consulting and audit services under one roof, a position that Andersen had supported until now.”

“The scramble by most of the big firms to bolster their image shows just how worried accountants are about the prospect of new regulations or legislation. By acting now, the firms’ executives hope to pre- empt such moves and preserve as much business as possible.”

” ‘They’re under the gun,’ said Arthur Levitt, a former chairman of the Securities and Exchange Commission, adding that the proposals were constructive. ‘It suggests that the firms have gotten the message. We’ll have to see the details of what they’ve agreed to and how it’s brought about. ‘”

“Enron’s use of partnerships and other financing vehicles, and the role played by Arthur Andersen, remains sketchy. Legislators complained yesterday that Enron, which has filed for bankruptcy protection, has refused to turn over important records.”

“Executives of the firms are trying to head off legislation or regulation that they regard as too tough, said Arthur W. Bowman, editor of Bowman’s Accounting Report. Even if the Big Five firms fail to deter the S.E.C. from issuing new rules, he said: ‘This will mollify Congress, and Congress won’t pass laws. If the S.E.C. sets up a rule, the S.E.C. can change a rule. If Congress passes a law, its hard to change.’ “