Observers See Dangers in Burgeoning Consulting Practices at Major Audit Firms
Changes Since 2007
NYU professor Jones pointed out that when Sarbanes-Oxley was passed 10 years ago, accounting firms were not supposed to provide consulting and many other non-audit services for their audit clients, although there were some exceptions, such as tax services.
“The firms, particularly the major firms that do work in the federal environment, were asked to give up consulting,” he said. “That’s the way it’s been for about 10 years, or at least it seems that way. The idea was that the major firms could not do consulting work for their audit clients. They could do consulting work for their non-audit clients, but they could not mix the two together for the same client. That kind of reduced the income level for them. Lo and behold, what happened?”
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