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Reforms may be too late

Tuesday, March 12, 2002 | 9:33 a.m.

Arthur Andersen is rushing to show that it's serious about reforming itself in the wake of the Enron Corp. scandal. But for many of its clients, it's too little, too late.

Even as Andersen's oversight committee announced its first series of reforms for the troubled accounting firm Monday, another major client dumped Andersen as its auditor. FedEx Corp. followed the lead of other blue chip companies, including Delta Air Lines, Freddie Mac, Merck & Co. and SunTrust Banks.

Paul Volcker, the former Federal Reserve chairman who is overseeing the board charged with making over Andersen, acknowledged that the reforms may not come in time to save the firm.

"What we have here is a run on the bank because everyone else is running," Volcker told reporters. "If everybody leaves, there's no firm left. Obviously it's not good for the country for 2,500 businesses looking around for a new auditing firm overnight."

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