The age of technology, like everything else in life, is a double-edged sword and the Big Four, the early adapters of the technology innovations now widely being used, are quickly learning that. For example, go to Yahoo and search for "KPMG." Near the top of the page, there is a sponsor search result that reads "KPMG Tax Shelter Worries?" It is a hyperlink to an invitation from a law firm to investors in tax shelters offered by KMPG and Ernst & Young.
The invitation, at www.jameshoyer.com/problem_tax_shelters.html?se=Overture, begins with "If you're a wealthy individual or business owner using a tax shelter provided by KPMG or Ernst & Young, possibly working through an introduction from First Union/Wachovia, you're understandably nervous. The April 22, 2003 Wall Street Journal describes the U.S. Senate investigation into KPMG's and Ernst's questionable tax shelters, coming on the heels of the Internal Revenue Service's crackdown. You trusted these well-known accounting firms, and paid good money for their advice. Now you're wondering if you're bought trouble for yourself. Click here to contact us with your concerns."
As if KPMG doesn't have enough trouble already with regard to tax shelters, now you have law firms advertising for clients. Each time that KPMG is typed as a search on Yahoo, a hyperlink to that law firm's site pops up. Interestingly, that search doesn't pull up KPMG's U.S. site, although hyperlinks to foreign countries' KPMG sites do appear.
The technology double-edge sword is also coming back to strike KPMG with respect to a number of e-mails disclosed by the IRS. These internal KPMG e-mails reportedly involve discussions among KPMG executives about its FLIP tax shelters which refers to the product's "troublesome issue."
Yes the big Four's world is different from most other accounting firms. However, it is my guess that the plaintiffs' attorneys are learning a lot at their expense. Although accounting firms can't stop lawyers from using technology already in place, they can certainly put safeguards to make sure their technology doesn't come back to haunt them. Smaller accounting firms would be wise to learn from the Big Four.
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