An accountant may wear many hats. Let's see, there is most trusted advisor, auditor, tax preparer, tax advisor, financial planner, advocate, and consultant, to name just a few. Lately, it seems that the Big Five is having a little trouble with some of those hats. For example, the Department of Justice and the SEC weren't happy with how Andersen was wearing its audit hat with regard to Enron.
And just recently, the IRS indicated it wasn't satisfied with some accounting firms' tax advisory caps. In one instance, the IRS reached agreement with PricewaterhouseCoopers on resolving issues relating to tax shelter registration for some of its clients. PwC also made a substantial payment to IRS without admitting any wrongdoing and promised to do a better job of registering tax shelters and maintaining lists of investors in tax shelters. That was followed shortly by enforcement actions instituted by the IRS against KPMG and BDO Seidman also to compel disclosure about tax shelter dealings.
The problem is that when someone is wearing so many hats, there develops a little confusion over what role is being performed. Take the disputes with the IRS over tax shelter disclosures: Is the accounting firm properly advocating a client's position or willfully interfering with tax administration when it refuses to divulge the information requested by the IRS?
The problem appears to exist even among accounting firms. You have PwC saying that although it did nothing wrong, it will still pay the IRS a substantial amount and agree to cooperate in the future. Contrast this to KPMG and BDO Seidman who are in reality saying, "If you think we are doing something wrong, prove it."
Accountants have been stereotyped in the past wearing green eyeshades. With so many chapeaus to chose from that is no longer the case. These many hats are not just fashion statements, but an acknowledgement that the environment accountants work in is dramatically changing.
