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Source: CPA Practice Management Forum
While many accountants believe Sarbanes-Oxley was a response to unethical behavior of just a few people in the accounting profession, it has nevertheless caused changes in accounting firm ethics and operations.
Allan Koltin, president of PDI Global, Chicago, sees a number of changes:
- Partner compensation methods are changing. Technical competence, which in recent years lost value relative to rainmaking, is now regaining some of its ground.
- Partners are more risk-averse. They are more likely to fire clients whom they believe create risk for the firm.
- Firm governance is trending away from CEO authority in favor of partnership decision-making.
Bruce Beach, managing partner of Tucson’s Beach, Fleischman & Co., believes that while the onset of Sarbanes-Oxley was a positive event, SOX will not affect accounting profession ethics. Beach says the profession views SOX as a source of new business, and accountants are more focused on compliance than on the big picture. But he does believe most accounting firms have strong ethical cultures.
Accounting firms are trying to make ethics pervasive. According to Koltin, they are holding “town meetings” at which they discuss specific cases in which clients pressured partners, who nevertheless insisted on doing the right thing, even at the risk of losing the client.
From CPA Practice Management Forum, CCH Incorporated, 800-449-8114, September 2005, p. 3. |
