J
Jim Hudspeth
Small Accounting Firms Exit Auditing
Aug. 28, 2003 (The Washington Post) -- Hundreds of small accounting firms
are struggling under tough new auditing rules adopted after a string of
corporate scandals and regulatory probes, and several are exiting parts of
the business they view as increasingly risky, according to industry
experts.
Over the past few months, New York's Grassi & Co. and Citrin Cooperman & Co.
LLP; Los Angeles's Good, Swartz, Brown & Berns LLP, and several other
accounting firms have severely curtailed or abandoned the business of
auditing public companies. Spurred by failures at Enron Corp. and WorldCom
Inc., where auditors failed to catch serious accounting problems, Congress
last year imposed limits on the kind of work auditors could do and created
an industry oversight board to set new professional standards.
<snip>
That could make it harder for these kinds of firms to find auditors,
although not every accounting firm is rushing to abandon them.
"One man's garbage is another man's antique. Everybody assesses risk
differently," said Jeffrey M. Weiner, managing partner of Marcum & Kliegman
LLP in Woodbury, N.Y. Weiner said his firm has picked up more than 40
public audit clients from rivals exiting the business over the past year.
Some accounting firms are waiting for regulators to sketch out more complete
oversight and disciplinary plans before deciding whether to stop auditing
public firms. Industry insiders said these firms are trying to assess the
cost of registering with the oversight board and training staffers on the
latest rules and standards, and determine if they have enough revenues from
public companies to cover those costs or if they can raise audit fees
sufficiently to make the work profitable.
<snip>
The Public Company Accounting Oversight Board recently started an outreach
program to help small audit firms cope with the onslaught of registration,
a nod to the fact that small firms handle work for many entrepreneurial
companies that "create most new jobs and many new ideas," said board
chairman William J. McDonough at a public meeting last month.
<snip>
http://www.smartpros.com/x40299.xml
Jim Hudspeth
Aug. 28, 2003 (The Washington Post) -- Hundreds of small accounting firms
are struggling under tough new auditing rules adopted after a string of
corporate scandals and regulatory probes, and several are exiting parts of
the business they view as increasingly risky, according to industry
experts.
Over the past few months, New York's Grassi & Co. and Citrin Cooperman & Co.
LLP; Los Angeles's Good, Swartz, Brown & Berns LLP, and several other
accounting firms have severely curtailed or abandoned the business of
auditing public companies. Spurred by failures at Enron Corp. and WorldCom
Inc., where auditors failed to catch serious accounting problems, Congress
last year imposed limits on the kind of work auditors could do and created
an industry oversight board to set new professional standards.
<snip>
That could make it harder for these kinds of firms to find auditors,
although not every accounting firm is rushing to abandon them.
"One man's garbage is another man's antique. Everybody assesses risk
differently," said Jeffrey M. Weiner, managing partner of Marcum & Kliegman
LLP in Woodbury, N.Y. Weiner said his firm has picked up more than 40
public audit clients from rivals exiting the business over the past year.
Some accounting firms are waiting for regulators to sketch out more complete
oversight and disciplinary plans before deciding whether to stop auditing
public firms. Industry insiders said these firms are trying to assess the
cost of registering with the oversight board and training staffers on the
latest rules and standards, and determine if they have enough revenues from
public companies to cover those costs or if they can raise audit fees
sufficiently to make the work profitable.
<snip>
The Public Company Accounting Oversight Board recently started an outreach
program to help small audit firms cope with the onslaught of registration,
a nod to the fact that small firms handle work for many entrepreneurial
companies that "create most new jobs and many new ideas," said board
chairman William J. McDonough at a public meeting last month.
<snip>
http://www.smartpros.com/x40299.xml
Jim Hudspeth