For years, I have watched Big Five (and other) accounting firms successfully position their consulting engagements, as complementary to their attest work. It is immensely frustrating to watch our prospects hire their auditing firm as an “independent” consultant to help them through their ERP software selection process. Many companies are simply not aware that the process is rigged to allow the audit firm to recommend software they represent.
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AKA Enterprise Solutions
New York, N.Y.
It would have significant impact. Currently, clients who meet these criteria represent about twenty percent of our information technology consulting annual revenue. Obviously, each client situation would have to be examined individually as to the revenue from audit as compared to IT consulting. But a business decision would have to be rendered and I suggest that the audit work would be considered more valuable as an annuity compared to the IT consulting revenue which is commonly viewed as “project” work.
Tier One Technology Partners
Our firm finds itself in the position of performing some consulting and other services for audit clients. In the case of some of our government clients, we will give up the audit work and keep the other services and consulting. In every case this seems to be perceived by the client as the most valuable (non-commodity) service.
Tom C. Davis, CPA
Davis, Nichols & Associates
I think that CPA firms will continue to shed their reselling operations.
Many firms that acquired or started reselling divisions several years ago are finding out that being a reseller is quite different than their traditional business. The software products take time to learn, it is difficult to fully grasp all the various modules, technology continually changes, and software is always being upgraded. Staffing creates additional challenges.
Scott M. Boedigheimer, CPA
DMS Technology Solutions
This split would probably destroy our firm. We are a small CPA firm providing services only to nonprofits. Cutting consulting off from attest work would sink the firm, as neither, as a standalone could afford the infrastructure (admin staff, IT, and marketing). The line needs to be drawn at splitting attest work and consulting with SEC clients. The AICPA is going a bit overboard as a reaction to possible governmental regulation of our practice.
Char Davies, CPA
Jacobson Jarvis & Co.
Since our firm does both audit and consulting, it would appear that we would need to create two separate companies with different owners. Since I don’t do ANY audit work (along with 80 percent of the rest of the firm), it seems that those partners and staff that do both audit and consulting would have to make a choice as to what company they wanted to be part of.
Kendall K. Wheeler, CPA,
RSM McGladrey provides over $35 million of technology consulting services to clients across our firm. While this is currently less than 10 percent of RSM McGladrey’s total revenues, it is an important part of our firm’s consulting services offering. We don’t believe that the AICPA will require us to choose in the case of non-SEC regulated clients. But if it does happen, I believe we would look to an alternate structure that allows us to retain a close working relationship with RSM McGladrey in serving small and medium-sized organizations across our market territories.
Kansas City, Mo.
If CPA firms are forced to choose between offering auditing and consulting or reselling services, the impact to our firm would be closer relationships and alliances with CPA firms. We believe this type of working relationship is quite beneficial to the CPA firm, but more importantly, the client would benefit even more if CPA firms were forced to only offer auditing consulting services. SWK takes pride in its ability to add value to the CPA firm and have happy, satisfied clients.
Lynn K. Berman