Two pieces of news this week caught my attention - A new poll found that faith in the Securities and Exchange Commission is at an all-time low, and fast-growing New York accounting firm Citrin Cooperman has decided to no longer audit public companies.

Coincidence? I don’t think so.

According to a report by RoperASW, the SEC garnered the lowest rating of 21 government agencies. The last time investors hated the financial market watchdog this much was back during the recession of the mid-1990s. And you could argue that this time around, there’s even more to hate.

"The significant change in public attitude toward the SEC reflects concerns that the agency is understaffed, asleep at the switch or in bed with corporate insiders," RoperASW chief executive Ed Keller said in releasing the results.

Those are serious problems that may take the agency years to overcome, although a good market rally might help to ease the pain. But I think the average investor has finally reached a level of sophistication about how the nation’s capital markets work, and the greed and collusion that can take places at the highest levels of corporations and government agencies. Investors’ eyes are now wide open, and in the immortal words of rocker Pete Townsend, they want to make sure that they "won’t get fooled again."

Accountants, particularly those in public practice, have suffered a public flogging following Enron and WorldCom. And the passage of the Sarbanes-Oxley Act and creation of a new oversight board means that any firm coming within an inch of a public company will need to conduct the engagement with the highest level of care and control. And even then, there’s no guarantee they won’t be defrauded or sued or worse.

So you really can’t blame Citrin Cooperman for gracefully bowing out of the game. I don’t know how many public companies they audit, but I imagine this niche doesn’t account for a majority of the firm’s revenue. Accounting firms have been diversifying away from the audit for nearly a decade now, and it makes great sense for any firm that doesn’t depend on public audits to steer far away from that minefield. The Big Four don’t have that luxury, but expect more regional firms to follow in Citrin Cooperman’s footsteps and get of the public audit business - for good.

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