New York (Aug 13, 2002) -- James Castellano, chairman of the American Institute of CPAs, on Monday warned that restrictions on small and midsized CPA firms serving privately-held companies is a possible "cascade" byproduct of the recently-passed Sarbanes-Oxley Act restricting the services firms can provide to public audit clients.

The federal law includes a provision that directs state regulators to independently determine whether to apply similar standards in their jurisdictions. That could affect small and mid-size firms including "firms like mine," Castellano, who is also a partner in Rubin, Brown, Gonstein & Co. of St. Louis, Mo., said in a tele-conference sponsored by the Advisory Board, a group of accounting firm practice management consultants.

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