Small companies and 404 compliance

With financial and regulatory reform underway, companies with market cap under $75 million won't need their auditors to sign off on the internal controls as part of SOx 404. However, management must still comply with meeting the requirements of their assertion as to the adequacy of ICFR.

And that means, that the public accounting firms need to cut their fees for SOx 404 assistance or let more agile and focused professionals and smaller firms do the work. CFO's are coming to realize they can save a lot of money on fees.

I recently talked with a CFO who is now paying less than 1/3 of what he paid last year-for virtually the same work!!

Pushing rates down for consulting firms

A colleague of mine recently asked me how I'm doing in business on my own. I said I'm doing okay and continue to build client base. I asked how he's doing and his response: great, except guys like you are pushing our rates down.

I find this to be a jab of frustration from the larger consulting firms. I don't have the overhead that the larger firms do, and provide a better level of service, at a fair price. The larger firms became accustomed to higher rates in the wake of SOx 404 and now they struggle to maintain compensation structures that don't fit the economy.

Here's my take: the model of the Big 4 and consulting firms is broken and it's time to make changes to fix this. Outsourcing work to India or the Philippines will reduce costs, but risk increases in trying to manage quality of service.

Seriously-is any partner's time worth upwards of $400-$700 on your engagements? I think not!

Consultants and their fees...

I ran across an article in CFO Magazine, June 2010 that I found to be on point. See http://cfo.com/article.cfm/14499509/2/c_14499796. 

There's no question in my mind that the larger firms are struggling with their fee structures in light of the overhead they have and the hangover from SOx 404 fees. So, a logical option is to staff projects with less qualified professionals-'NO YOU SAY'?  Yes-that will be inevitable. And in my experience, many of the best people have already left the firms and moved to industry or other roles.

Keep on keeping on...

To FTP

I'm working on a large due diligence project and had to find a way to transfer large files to my team. I set up an FTP site through my web host; GoDaddy.com.

Then I had to find ftp software that worked for me and for the team. I tried GoFTP and it was okay. Then tried SmartFTP and really like it. It's faster, easier to use and works well for the team.

Much better than flash drives and cd's!!

Forensic accounting projects

Leveraging my experience in litigation support and expert witness testimony, we've been asked to propose on a forensic accounting project for a condominium association. Looking forward to hearing from and working with the board, on behalf of the association.

Market seems to be improving

I'm seeing more activity on LinkedIn and other sites related to contract opportunities. I still know several great people that are out of work (in the internal audit space).

Internal audit is my strongest skillset-followed by forensic accounting and due diligence. Looking forward to the Forensic Accounting conference in Chicago next month.

Forensic Accounting

We will be presenting at the IL CPA Society's Annual Forensic Accounting conference on June 2, 2010. Currently preparing materials for our session on SAS 99 and internal controls.

Please attend the conference...more information is available at: http://www.icpas.org/calendar/ConferenceDetail.aspx?ccode=C36928