Accounting firms are making headlines again and it has nothing to do with auditing. Instead it deals with tax advice--what is commonly being described as the selling of tax shelters. And once again, like with Enron, it doesn't involve the local or regional firms, but rather the national ones.

The press is portraying this advice as having been packaged in a slick, hush-hush sales presentation. You also have the IRS investigating a number of national firms and the clients who follow those firms' advice suing them. It gets rather involved.

Just because local and regional firms aren't mentioned in these news stories, doesn't necessarily mean that they are not impacted. Just ask those firms that do Yellow Book auditing or those that audited public companies prior to the enactment of Sarbanes-Oxley legislation. Most firms are now eagerly watching their state legislative bodies and accounting boards to see what they will do. This is an upside situation for a number of local and regional firms. Many are hiring experienced ex-staffers and ex-partners from Andersen who can hit the ground running. Also, there are opportunities to pick up some work involving services that an auditor is now prohibited from performing for its public company audit client.

Clearly, the reputations of the national firms are taking quite a hit. Although there are many more jokes being told about accountants, the reputation of the local accountants is still pretty good. I doubt if this second wave will hurt them. Isn't it amazing with all their billions of dollars of revenue and all their strategic planning, many of the national firms were blind to what awaited them down the road? I wonder how many more waves will hit them and in what shape, and how many will be left, after the poundings.

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