Small Accounting Firms Exit Auditing


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
 
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J

John_B

A lot of the regulars on this board want to hang the audit partner
who lets a fraud slip through. This news item illustrates what
happens when the stick gets much bigger than the carrot.

Just how do you propose to motivate people to take on the awesome
responsibility of an audit partner?

[My prejudices are based on having been employed by one of the
"final four" long enough to retire and collect a monthly annuity.
Most of my career was spent at the National office or World Firm
level projects, so I got to meet a lot of partners.]
 
R

Ron Todd

ROFLAO



A lot of the regulars on this board want to hang the audit partner
who lets a fraud slip through. This news item illustrates what
happens when the stick gets much bigger than the carrot.

Just how do you propose to motivate people to take on the awesome
responsibility of an audit partner?

[My prejudices are based on having been employed by one of the
"final four" long enough to retire and collect a monthly annuity.
Most of my career was spent at the National office or World Firm
level projects, so I got to meet a lot of partners.]


Jim said:
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

Best Regards.

*****************************************
Boycott list:

Belgium, France, Germany, Finland, Sweden, Switzerland, PRC, Iran, Syria,
Hollywood, San Francisco, Massachusetts, New York City, Sierra Club, ACLU,
Movies of the first blacklist, Turner, Madonna, S. Crowe, Dixie Chicks, Cher, U2, rapp,
Trudeau, W.Miller, Disney, ABC news, CBS news, NBC news, CNN, PBS, B&H Photo Video,

Sometimes the only influence you have is to say, "No, I'm not buying."

For those who are unclear about the situation, California is the Clinton - Davis model for the rest of the United States of America.
 
J

Jim Hudspeth

Ron said:
A lot of the regulars on this board want to hang the audit partner
who lets a fraud slip through. This news item illustrates what
happens when the stick gets much bigger than the carrot.

Just how do you propose to motivate people to take on the awesome
responsibility of an audit partner?

[My prejudices are based on having been employed by one of the
"final four" long enough to retire and collect a monthly annuity.
Most of my career was spent at the National office or World Firm
level projects, so I got to meet a lot of partners.]
ROFLAO
I don't have time to roll on the floor and laugh. I'm too busy looking for
rope.

Jim Hudspeth
 
R

Ron Todd

Ron said:
A lot of the regulars on this board want to hang the audit partner
who lets a fraud slip through. This news item illustrates what
happens when the stick gets much bigger than the carrot.

Just how do you propose to motivate people to take on the awesome
responsibility of an audit partner?

[My prejudices are based on having been employed by one of the
"final four" long enough to retire and collect a monthly annuity.
Most of my career was spent at the National office or World Firm
level projects, so I got to meet a lot of partners.]
ROFLAO
I don't have time to roll on the floor and laugh. I'm too busy looking for
rope.

Jim Hudspeth
Now Jim, sit down and count to fifty.

After all, public accountants are the most self destructive people I
have met. A little more aberrant behavior and I am confident the
profession will be irrevocably destroyed.





Best Regards.

*****************************************
Boycott list:

Belgium, France, Germany, Finland, Sweden, Switzerland, PRC, Iran, Syria,
Hollywood, San Francisco, Massachusetts, New York City, Sierra Club, ACLU,
Movies of the first blacklist, Turner, Madonna, S. Crowe, Dixie Chicks, Cher, U2, rapp,
Trudeau, W.Miller, Disney, ABC news, CBS news, NBC news, CNN, PBS, B&H Photo Video,

Sometimes the only influence you have is to say, "No, I'm not buying."

For those who are unclear about the situation, California is the Clinton - Davis model for the rest of the United States of America.
 
J

Jim Hudspeth

Ron said:
Ron said:
A lot of the regulars on this board want to hang the audit partner
who lets a fraud slip through. This news item illustrates what
happens when the stick gets much bigger than the carrot.

Just how do you propose to motivate people to take on the awesome
responsibility of an audit partner?

[My prejudices are based on having been employed by one of the
"final four" long enough to retire and collect a monthly annuity.
Most of my career was spent at the National office or World Firm
level projects, so I got to meet a lot of partners.]


ROFLAO
I don't have time to roll on the floor and laugh. I'm too busy looking
for rope.

Jim Hudspeth
Now Jim, sit down and count to fifty.

After all, public accountants are the most self destructive people I
have met. A little more aberrant behavior and I am confident the
profession will be irrevocably destroyed.
You are probably right about this.

Unfortunately, "civilization" as we know it cannot survive without
accountants.

Best regards,

Jim
 
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P

Paul A. Thomas

Ron Todd said:
After all, public accountants are the most
self destructive people I have met.

I fully believe that the AICPA is self-destructive, and fully intends to
take the profession with it.

One only needs to look at their track record and see how many times they
attempt to keep accountants doing accounting work, and how many times they
push accountants to do other things, like Elder Care, Web-Trust, ABC-123-XYZ
whatever, sell insurance, financial products, used cars, etc. All the
while allowing other non-licensed individuals to provide the same services
without regulation, restrictions, etc.

A little more aberrant behavior and I am confident
the profession will be irrevocably destroyed.
Well, the "Accountant" or "CPA" and especially the "Auditor" will be the
whipping boy for quite a while.

It seems that the American way of blaming others for one's own failings is
still strong. Whether those failings are from the greed of Board of
Directors, greed of shareholders, or both seems to be lost on today's
society.

Apparently the press doesn't want to look at it from that persepctive. I'm
positive ther are companies that have been quite truthful in their
presentation of the company finaicial position. Those companies were
probably the ones that didn't have "stellar" performance, and therefore
lacked the investing public's eye, had flat stock price growth, paid modest
dividends, and are still around today.

Unfortunately these companies that are today, writing down millions,
billions and trillions of dollars will soon be back to their old tricks.
 
R

Ron Todd

Ron said:
Ron Todd wrote:


A lot of the regulars on this board want to hang the audit partner
who lets a fraud slip through. This news item illustrates what
happens when the stick gets much bigger than the carrot.

Just how do you propose to motivate people to take on the awesome
responsibility of an audit partner?

[My prejudices are based on having been employed by one of the
"final four" long enough to retire and collect a monthly annuity.
Most of my career was spent at the National office or World Firm
level projects, so I got to meet a lot of partners.]



ROFLAO



I don't have time to roll on the floor and laugh. I'm too busy looking
for rope.

Jim Hudspeth
Now Jim, sit down and count to fifty.

After all, public accountants are the most self destructive people I
have met. A little more aberrant behavior and I am confident the
profession will be irrevocably destroyed.
You are probably right about this.

Unfortunately, "civilization" as we know it cannot survive without
accountants.

Best regards,

Jim
Yes, I agree. More specifically Auditors.

Which, is why I am also convinced that we are headed for another Dark
Age. I'm not sure how long we will hold out, civilization seems to be
crumbling at an increasing rate, but I don't give Europe more than
three more generations.




Best Regards.

*****************************************
Boycott list:

Belgium, France, Germany, Finland, Sweden, Switzerland, PRC, Iran, Syria,
Hollywood, San Francisco, Massachusetts, New York City, Sierra Club, ACLU,
Movies of the first blacklist, Turner, Madonna, S. Crowe, Dixie Chicks, Cher, U2, rapp,
Trudeau, W.Miller, Disney, ABC news, CBS news, NBC news, CNN, PBS, B&H Photo Video,

Sometimes the only influence you have is to say, "No, I'm not buying."

For those who are unclear about the situation, California is the Clinton - Davis model for the rest of the United States of America.
 
R

Ron Todd

I fully believe that the AICPA is self-destructive, and fully intends to
take the profession with it.
Yes, but I see the AICPA as a reflection of the self destructive
behavior of the profession. They are merely the lemmings at the head
of the heard.
One only needs to look at their track record and see how many times they
attempt to keep accountants doing accounting work, and how many times they
push accountants to do other things, like Elder Care, Web-Trust, ABC-123-XYZ
whatever, sell insurance, financial products, used cars, etc. All the
while allowing other non-licensed individuals to provide the same services
without regulation, restrictions, etc.
The 'initiatives' were stupid, many pointed out they were stupid to
start with, yet look how many in the profession bought in. I am sure
there are still legions defending these programs.

Well, the "Accountant" or "CPA" and especially the "Auditor" will be the
whipping boy for quite a while.
From what I have seen a good whipping is deserved by many. However, I
have not seen any of the whippers to be without sin. In many cases
they profited before, during, and after the stupidity of the auditors.

A side issue is that the auditors are now being used as a convenient
item of misdirection by other miscreants. Auditors should be pointing
this out, but that kind of auditing seems to have disappeared.
It seems that the American way of blaming others for one's own failings is
still strong. Whether those failings are from the greed of Board of
Directors, greed of shareholders, or both seems to be lost on today's
society.
Unfortunately, I think that many have the knowledge to really point
this out, and finger the bad actors, have been so compromised by their
own misdeeds that they have compromised the successful prosecution of
many of the cases beyond recovery.

Apparently the press doesn't want to look at it from that persepctive. I'm
positive ther are companies that have been quite truthful in their
presentation of the company finaicial position. Those companies were
probably the ones that didn't have "stellar" performance, and therefore
lacked the investing public's eye, had flat stock price growth, paid modest
dividends, and are still around today.
"The Press," is stupid and has its own agenda. They are basically in
the historical position of being in the forefront of their ill
conceived revolution. Which means if they're successful, in the grand
old tradition, they will be the second ones up against the wall.


Unfortunately these companies that are today, writing down millions,
billions and trillions of dollars will soon be back to their old tricks.
I don't think many of the enterprises will survive, but the bad actors
will. If you loot enough, you can always buy protection. Isn't
Robert Vesco still "at large?"




Best Regards.

*****************************************
Boycott list:

Belgium, France, Germany, Finland, Sweden, Switzerland, PRC, Iran, Syria,
Hollywood, San Francisco, Massachusetts, New York City, Sierra Club, ACLU,
Movies of the first blacklist, Turner, Madonna, S. Crowe, Dixie Chicks, Cher, U2, rapp,
Trudeau, W.Miller, Disney, ABC news, CBS news, NBC news, CNN, PBS, B&H Photo Video,

Sometimes the only influence you have is to say, "No, I'm not buying."

For those who are unclear about the situation, California is the Clinton - Davis model for the rest of the United States of America.
 
J

Jim Hudspeth

Ron Todd wrote:

I don't think many of the enterprises will survive, but the bad actors
will. If you loot enough, you can always buy protection. Isn't
Robert Vesco still "at large?"

Vesco was convicted in connection with an alleged scheme to defraud Cuba's
pharmaceutical industry. Also arrested by the Cubans was Vesco's partner
and houseguest, Donald Nixon, nephew to the former president. Nixon was
allowed to return to the U.S., but Vesco went to the slammer. He gets out
in 2009, when he'll be 74. Vesco's Cuban wife Lidia was convicted on lesser
charges and gets out in 2005.

http://slate.msn.com/id/1007117/

Jim Hudspeth
 
R

Ron Todd

Ron Todd wrote:




Vesco was convicted in connection with an alleged scheme to defraud Cuba's
pharmaceutical industry. Also arrested by the Cubans was Vesco's partner
and houseguest, Donald Nixon, nephew to the former president. Nixon was
allowed to return to the U.S., but Vesco went to the slammer. He gets out
in 2009, when he'll be 74. Vesco's Cuban wife Lidia was convicted on lesser
charges and gets out in 2005.

http://slate.msn.com/id/1007117/

Jim Hudspeth
So thirty years and he has never been tried in an American court. I
notice that the term he is serving is for an unrelated Cuban offense.
So technicality, as far as we are concerned he is still at large.
Just reinforces my belief in the consistency of human behavior, once a
crook always a crook.

I thought the Swiss treatment of Bernie Cornfield was rather
disgusting. Eleven months in the slammer while they tried to come up
with some charges. I think it is just one of the problems the UK is
going to have if actually gets into the EU system of romanish laws.
Also a reason why I am extremely leery of any accounting
pronouncements that come out of Europe.



Best Regards.

*****************************************
Boycott list:

Belgium, France, Germany, Finland, Sweden, Switzerland, PRC, Iran, Syria,
Hollywood, San Francisco, Massachusetts, New York City, Sierra Club, ACLU,
Movies of the first blacklist, Turner, Madonna, S. Crowe, Dixie Chicks, Cher, U2, rapp,
Trudeau, W.Miller, Disney, ABC news, CBS news, NBC news, CNN, PBS, B&H Photo Video,

Sometimes the only influence you have is to say, "No, I'm not buying."

For those who are unclear about the situation, California is the Clinton - Davis model for the rest of the United States of America.
 
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