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Effect of Sarbanes–Oxley Act doesn’t trickle down

Effect of Sarbanes–Oxley Act doesn’t trickle down

by Rick Turoczy on March 27, 2005

Sarbanes-Oxley (SOX) legislation passed by Congress in 2002, requiring tough new auditing standards to combat a flood of corporate scandals, has boosted the bottom lines at the big-four accounting firms; however, Central New York audit firms have seen little impact.

According to a recently released survey of Fortune 500 companies conducted by the Association of Audit Committee Members (AACM), auditing fees at the big four firms increased 100 percent in 2004. The top two gainers, PriceWaterhouse-Coopers (134 percent) and KPMG (109 percent), both have offices in Central New York.

Smaller, local accounting firms, however, have not experienced a trickle-down effect. For starters, Sarbanes-Oxley (SOX) only applies to publicly held companies, says Dermody, Burke & Brown, LLC partner Brian DuMond. He claims the lack of growth stems from the fact that most local accounting firms deal primarily with private companies, individuals, and non-profits unaffected by the new SOX rule changes.

“There is not a tremendous amount of publicly held companies located here,” says DuMond, “so we have not seen a big increase in demand for our services.”

Effect of Sarbanes–Oxley Act doesn’t trickle down

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