High Point, NC (Aug. 5, 2003) -- Summerford Accountancy no longer serves as the forensic accounting and fraud examination service team at national accounting firm Dixon Odom, thanks largely to the Sarbanes-Oxley Act.
The Act prohibits accounting firms from providing non-audit or consulting services for the public companies they audit. It boosts the independence of corporate boards and auditors, allowing audit committees to hire independent auditors at the corporation's expense.
Sarbanes-Oxley rules also requires chief executives and financial officers to certify company financial statements and holds them criminally liable for inaccuracies, stiffens the maximum penalty for securities fraud and makes it a felony to destroy audit-related documents.
The now former Dixon Odom division had difficulty closing client deals due to these specific rules in the Act. As such, Summerford is independent once again.
The Birmingham, Ala.-based firm, which Dixon Odom acquired and renamed as its accounting and fraud examination service team in 2001, will continue to work with Dixon Odom in a similar capacity. The group had six people at the time of the merger and little idea that a law such as Sarbanes-Oxley might affect the relationship.
“We enjoyed a good working relationship with Ralph’s firm before they officially became a part of Dixon Odom and although they will no longer be a part of the firm, we look forward to working with them in the future,” Eddie Sams, managing member at Dixon Odom said in a statement. “This is a friendly departure and we wish Ralph and the folks at Summerford Accountancy the best of luck as they resume their independent status.”
No one at Dixon Odom was available for further comment at press time.
Summerford president and founder Ralph Summerford was also unavailable for comment, however, a recent Birmingham Business Journal article confirmed his views on the split.
"Anytime you have a large organization, there is the potential for conflicts of interest," Summerford told the paper. "Some of the cases we would normally work on we couldn't. We were starting to have problems accepting clients because of their relationship with Dixon Odom."
-- Seth Fineberg
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