Arthur Andersen's new chief executive Joseph Berardino.

Berardino was speaking at his first press conference since his appointment two weeks ago. He said the firm was free to "go forward very aggressively" after resolving disputes with the U.S. Securities and Exchange Commission and Accenture, formerly AA’s sister firm, Andersen Consulting.

But he explained that he was "very concerned" about the drop in U.S. graduates entering the accounting profession and the difficulties the firm is facing in hiring professionals from other sectors.

"Our cradle to grave approach to developing people is broken. It will not survive in an economy where people will move from time to time," said Berardino.

He said the firm needs to be more aggressive in hiring people from outside the profession as well as graduates. He said that in addition to offering skills relevant to the new economy, the firm will also have to offer people career choices within the firm so they don’t have to look elsewhere.

"We also think we can enhance our partnership model," added Berardino. At the beginning of the year AA introduced a five-person global executive team, including Berardino’s post. But he declined to comment on whether the firm would adopt more management structures associated with corporations, saying only that: "I have the answer in my mind, I haven’t communicated it to my partners yet, but we’re going to pull that together in the next few months."

Berardino was AA’s chief negotiator during its dispuite with the U.S. SEC over audit independence, and he said that he plans to build a "more constructive" relationship with the regulator.

However, he said he was still not satisfied with the agreement reached between the SEC and the U.S. accountancy profession. "We need rules that allow us to go out and acquire confidence quickly. And we just can’t survive effectively when we are hamstrung by affiliate rules where if you shake somebody’s hand they need to follow the same independence rules as though they are part of AA."

-- SmartPros News Staff

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