MR. I think you can still develop proficiencies outside of developing them in consulting relationships with your audit clients, and you can transfer those proficiencies to audits when need be.
Auditors have always had to call in specialists when matters are outside their understanding. So if you’ve got this healthy IT consulting side that just doesn’t work on any audit engagements, I don’t see why you couldn’t pull them in to help work on the audit if they’re working on audit type work, not advocacy type consulting arrangements for your audit client.
COMMISSIONER UNGER: Are you familiar with the revenues of the accounting firms? Because I guess I should have asked which I didn’t, if you’re still here, is what percentage of the consulting revenues come from non-audit clients.
COMMISSIONER CAREY: Jack, of the really spectacular accounting disasters we’ve witnessed, is there any one or more that you think can be directly traced to a lack of auditor independence?
MR. CIESIELSKI: Good question. It’s hard toanswer that objectively because we don’t know how much non-audit services mattered to the auditing firm in any of those instances. I would say that in some of them I’ve seen the audit committee didn’t seem to have an extremely strong background in finance and accounting matters.
But in the extreme examples we’ve seen since 1998, outside of what has been written in books I can’t see anything in the publicly-available information that would lead you to believe that there is an impairment of independence because of consulting. Continue reading