IBM to purchase PricewaterhouseCoopers consulting.

• Author: Swartz, Nikki
• Position: News, Trends & Analysis - Brief Article

For accounting firms that moonlight as consultants, there has always been a potential for conflict of interest. But in the wake of the Enron scandal, in which Arthur Andersen, Enron's auditor, also collected sizable consulting fees, accounting firms that also offer consulting services have been trying to separate the two functions--and quickly.

Accounting firm PricewaterhouseCoopers has been pursuing options to spin off its consulting business for two years, so the recent announcement that IBM plans to purchase PricewaterhouseCoopers was not a big surprise.

For IBM, the move will accelerate its shift from selling just computers and software toward a future of providing information technology to corporate customers just as utility companies provide them electricity and gas. It agreed to pay $3.5 billion--$2.7 in cash and the balance in stock and convertible notes--for the consulting arm of...