The Sarbanes-Oxley Act and some highly publicized accounting restatements by companies like WorldCom, Freddie Mac, and Xerox have resulted in major changes in the financial reporting world.
When the Securities and Exchange Commission, armed with accounting probes and civil fraud complaints, came knocking on the doors of 10 corporate giants a year ago, six of them called on Huron Consulting Group for help.
Arising in May 2002 out of the ashes of Arthur Andersen LLP, about 250 former Andersen employees, led by former senior partner Gary Holdren, quickly picked up where they had left off by providing financial investigations, litigation analysis, and forensic accounting- in addition to operational consulting work — to some of the world's biggest corporate names.
"This is a very, very hot issue for us right now," says Holdren, president and CEO. Holdren wouldn't reveal revenue figures from the firm's disputes and investigations practice, but its financial operations consulting unit represents 60 percent of Huron's business. What's more, the firm opened an office in Washington, DC, in 2003 to focus more on financial investigations, securities litigation issues, and business disputes.
Holdren says that the firm's appeal comes from its small size and depth of experience. "We're working with the absolute biggest companies in the world. We've got very skilled people with 20-plus years who have served these big companies in the past. Yet, being a small, new organization without a lot of conflicts, we can move very quickly in a lot of our decision-making."
That unique combination has attracted a bevy of Fortune 500 clients that decline to be identified because of the nature of Huron's work. It has also lead the firm to recently file for an initial public offering of its stock.
Huron also gained recognition for its annual "Review of Financial Reporting Matters," a yearly study of accounting restatements that was adopted from Arthur Andersen's disputes and litigation practice headed by Joe Floyd, who also joined Huron in May 2002. "That's helped us to become a recognized player and to be seen as a firm that is truly independent — not associated with one of the Big Four," Holdren says.
Huron has 575 professionals in offices in Boston, Charlotte, Chicago, Houston, Miami, New York, San Francisco, and Washington, DC. In just two years, the firm has worked with some 500 clients on over 1,000 engagements. The firm is growing its operational consulting area business, made up of higher education and healthcare industries. Huron is now targeting the pharmaceutical industry, which faces scrutiny from a bevy of government agencies — including the Federal Trade Commission, Internal Revenue Service, Medicaid, and Medicare — over drug pricing issues.
In the future, Holdren plans to harness Huron's diverse offerings and offer across-the-board services to its clients. "If we went into a pharmaceutical company right now, we might go in there and do legal business consulting working with the general counsel. We then might be able to help them with transfer pricing matters or tax disputes. We would also be able to have valuation resources and help them take cost out of their organization through our strategic sourcing practice."
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