New Consulting Firms Specialize in SOX Support
Opportunity has knocked for consultants in the Sarbanes-Oxley Act, and entrepreneurs are forming new firms to help companies of all sizes meet the demands of the law. Some firms offer a blend of audit, tax and information technology services, while others target specific industries or focus on products that support compliance.
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Lowell Jobe quit his job as a senior manager at Deloitte & Touche in 2004 to start Assurance Consulting 3 (AC3) in Minnetonka, Minnesota, a firm that specializes in Sarbanes-Oxley auditing work, the Minneapolis Star-Tribune reports. “Scariest thing I ever did,” Jobe said. “It felt like a big risk leaving a very secure job. But the demand was so peaked and so high, I figured at a minimum I’ll be able to keep myself busy.”
Ac3 now employs 25 people and revenues totaled more than $4 million last year. Jobe told the Star-Tribune that AC3 can do a better job at lower rates than the Big Four firms. Jobe charges $100 an hour for Sarbanes work, in comparison to Big Four firm that typically charge $250 to $300 for the same services. Jobe credits the success of his firm to an experienced professional staff and technology tools that streamline the compliance process.
AC3 targets companies with $100 million to $500 million in revenue, although it works with larger and smaller companies, the Star-Tribune says.
Deloitte & Touche has launched a forensic and dispute consulting practice in its Columbus, Ohio office, led by David Axelrod, an attorney who formerly worked with the Department of Justice and regulatory agencies, the Columbus Dispatch reports. The Deloitte practice will provide Sarbanes-Oxley support and will also assist financial institutions that are now required to monitor suspected terrorist activities under the Patriot Act. The new practice will provide legal and accounting services, internal audits, training programs and document archiving.
Making the decision to use the right tools can go a long way toward easing the burden of Sarbanes compliance, says Lois Melbourne in the Sarbanes-Oxley Journal. Melbourne is CEO of Aquire, a company that makes OrgPublisher, the organizational charting software. Manually produced organizational charts are an invitation for trouble, she says. Changes occur rapidly in most organizations and payroll data, for example, won’t match the organization chart, a red flag compliance problem.
Melbourne recommends companies use organizational charting and unified workforce intelligence solutions that:
- establish a visual record of chain of command that shows positions reporting to positions, not people to people,
- have a mechanism that tracks failed access attempts to sensitive data so that they can demonstrate segregation of duties,
- keep a visual record of managerial responsibility for contractors,
- keep data on outsourced personnel through real workforce intelligence.
Compliance LLC in Wilmington, Delaware, recently announced that it will provide Sarbanes consulting services that focus on vendors, suppliers and service providers. George Lekatis, General Manager, says that vendors, suppliers and service providers must reposition their products. “Compliance is a must have." Availability, security, better IT services, all these services are “nice to have," he says.
Compliance LLC’s announcement of their new service lists many of the negatives companies harbor about consultants. In contrast, Lekatis says, “we never recommend firing your employees, and we have a fixed fee/fixed terms policy.”
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.