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Accountants just love Sarbanes

Accountants just love Sarbanes

by Rick Turoczy on February 14, 2005

The Big Five accounting firms, blackened by scandal a few years ago, firmly denied responsibility for the great corporate failures that occurred under the rules and standards they had established. Now reduced to the Big Four, the profession is back, enforcing a new raft of standards that replace and augment the ones they said were just fine only a few years ago.

It’s an amazing turnaround. Ridiculed as incompetents and sellouts, and the butt of numerous jokes, accountants are now riding a wave of unprecedented power and influence. Three years ago this week, former Fed chairman Paul Volcker called the profession “greedy.” Today, audit fees have doubled and accountants are heroes. Accounting firm executives are lumbering through the corporate world issuing directives, pushing around CEOs and board directors, and lecturing everyone on the moral and investment merits of Sarbanes-Oxley.

Of the many burdens created by Sarbanes, section 404 has drawn the most criticism. It requires all corporations to issue certified statements certifying the effectiveness of their internal accounting and financial controls. There is no evidence such reports and controls will ever add anything to the bottom lines of corporations. Some companies, including major firms such as Kodak, have received adverse audit opinions because of “material weaknesses” in their internal financial controls.

Accountants just love Sarbanes

{ 1 comment… read it below or add one }

Armand February 22, 2005 at 1:34 pm

You got it Man, you nailed it right on the head and I go with you.

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