“PricewaterhouseCoopers, the largest of the Big Five accounting firms, said it will file plans this spring to split off its management-consulting unit in an initial public offering, a move designed to help restore public confidence in the independence of the firm’s audits,” writes Jonathan Weill in today’s Wall Street Journal.

“Additionally, PricewaterhouseCoopers said it will endorse any future proposal to ban accounting firms from providing information-technology consulting services and internal-audit services to clients for which they provide independent audit opinions. Enron Corp. used Arthur Andersen LLP as both its internal and external auditor and for certain consulting services. PricewaterhouseCoopers previously had supported proposals to ban accounting firms from providing information-technology services to audit clients.”

“Increasingly, in the wake of Enron’s collapse and government investigations into Arthur Andersen’s audits of the Houston energy trader, investors and regulators have lodged complaints that auditors are plagued by conflicts of interest as a result of large fees they receive from audit clients for nonaudit services.”

” ‘We recognize like so many people that the Enron failure has created a huge crisis in confidence,’ PricewaterhouseCoopers’ chief executive, Samuel A. DiPiazza Jr., said in an interview. ‘This is a response to the crisis around the Enron failure and the confidence crisis in our own profession.”

“Mr. DiPiazza said the firm would be announcing the various initiatives and policy positions in a letter to clients this week.”

“PwC Consulting, the unit being split off, had roughly $6.67 billion in gross revenue last fiscal year and employs about 35,000 globally. The unit represented about a third of PricewaterhouseCoopers’s total gross revenue of $22.32 billion and about one-fifth of its total work force.”

“Earlier this week, PricewaterhouseCoopers named Thomas O’Neill the CEO of PwC Consulting. It specializes in management and information-technology consulting. Mr. O’Neill succeeds Scott Hartz, who stepped down. Mr. Hartz said he left in part because of ‘differences in tactics on how to achieve’ separation between the firm’s audit and consulting practices.”

“Many professional-services firms have come under increased pressure to separate their audit and consulting functions. PricewaterhouseCoopers had been trying to split off or sell its consulting unit for about two years but wasn’t successful. Talks to sell its management-consulting unit to Hewlett-Packard Co. for as much as $18 billion fell apart in November 2000 after the computer maker’s business began slipping.”