San Francisco (Aug. 4, 2004) — Turnover between clients and their independent accountants is on the rise according to data from research proxy firm Glass, Lewis & Co.
Through July, about 900 companies have ended their auditor engagements, a figure, that equals the change of auditors for all of 2003, according to a report in The Wall Street Journal.
Both Glass, Lewis & Co. and accounting experts have opined that the rise in auditor changes can be predicated on a number of factors, such as the non-audit services prohibitions in Sarbanes-Oxley; regular auditor rotation to hone corporate governance procedures; and “cherrypicking” of audit clients by larger firms, by eschewing less lucrative audit engagements for the higher-revenue services.
Also, auditors are getting tougher with some of their clients in the face of questionable or aggressive accounting maneuvers.
— WebCPA staff
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