The Canadian units of accounting firms KPMG and Arthur Andersen confirmed Friday that they are in talks to the merge their operations.

Should the merger proceed, the new company would operate as KPMG LLP, employ more than 5,000 people, and generate annual billings of more than $900 million.

“We have commenced the process of conducting due diligence,” KPMG Canada chairman and CEO Bill MacKinnon said in a release.

“We are working towards an agreement. Negotiations will be required to address the business and legal issues associated with bringing the two firms together. Any agreement will require approvals from the partners of both firms,” MacKinnon said.

“We are very pleased to be in discussions with KPMG,” said Andersen Canada managing partner Russel Robertson.

Earlier this week, KPMG and Arthur Andersen announced that merger discussions were underway among their country practices outside the United States.