SEC Takes Accounting Firms to the Mat

The SEC today announced plans to curb the accounting profession's participation in various consulting efforts. Concerned that accountants are compromising their ability to perform independent audits, the SEC is trying to force accounting firms to discontinue certain consulting activities or, as some firms have already begun doing, separate the activities completely from their audit practice.

Auditing, once the bread and butter of accountants, has dropped from 70 percent to 30 percent of accounting firm revenues, according to an SEC spokesperson. This does not reflect a reduction in auditing services provided, but an increase in consulting services provided by the firms.

Representatives from the Big Five, who held an anonymous press conference yesterday while girding for today's announcement, claim the new SEC rule is unwarranted and assert that there is no justification for imposing such a restriction.

The proposal, which will be posted on the SEC web site as soon as it is finalized, will be subjected to a 75-day comment period which will include public hearings.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.