Monday, October 10, 2005

Tax services and Sarbanes-Oxley – discussion continues

Matthew J. Barrett (Notre Dame Law School) published in Michigan State Law Review, pp. 463-504, 2004 an article (Tax Services as a Trojan Horse in the Auditor Independence Provisions of Sarbanes-Oxley) that argues that the failure of the Sarbanes-Oxley Act (see www.sarbanes-oxley.com) of 2002 to prohibit auditors for public companies from also providing tax services to audit clients or their executives and selling tax shelters to anyone remains a Trojan horse that threatens both the investing public and the auditing profession.
According to the author, while various tax services present potential conflicts of interest in differing degrees, drawing lines between different types of tax services, such as tax return preparation, tax consulting, and tax planning, presents very significant practical difficulties. Recognizing these practical difficulties, this article recommends a "bright line," best practice that would bar registered public accounting firms from rendering tax services to audit clients or their executives and promoting tax shelters to anyone. The article suggests that if an auditing firm embraces and advertises such a "total independence" policy, the firm may gain a competitive advantage in attracting new audit clients. Such an approach might even allow one or more non-Big Four accounting firms to compete favorably with the Big Four, reducing consolidation and increasing competition in the industry. View

1 Comments:

Blogger Julia Elvarado said...

Interesing Perspective on Genocide in RA
Filed under: Armenia , Diaspora , Travel - Posted by Katy on October 10th Blogger Marcia from Mission Trip to the Caucasus, blogs today on opinions on the Genocide in the Republic of Armenia.
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10 October, 2005 22:13  

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