Jottings By An Employer's Lawyer

Sunday, October 12, 2003

One of the Reasons We Got Sarbanes: Pressure on Accountants To Keep Profitable Clients

There have to be competing pressures when you are tasked both with monitoring compliance of public standards and being a rainmaker for your firm, a dual role that many accountants have found themselves in over the past few years. And now some academicians have done a study that, not terribly surprisingly, says that in dealing with those conflicting pressures, the one most closely linked to their own financial interest often wins out. A SmartPros website article reports on a soon to be published study in the Journal of Accounting and Public Policy. Their suggestion for making things better -- make failure to comply more costly with increased scrutiny and fines: the accountants will take that into account in making their internal assessments. Sad that it is needed, but not too terribly surprising.

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