The irony of the U.S. Securities Exchange Commission's war on public accounting firm's perceived conflict of interests is that it led to a massive consulting opportunity for the consulting arms of accounting firms.
The Corporate and Auditing Accountability and Responsibility Act, known as Sarbanes-Oxley (or SOX) was enacted on July 30, 2002. The federal law requires all U.S. public companies to address a number of issues, including the establishment of internal controls to better assure the accuracy of financial reports and disclosures.
An annual survey by Finance Executives International found that the average public company spent between $2 million and $3 million on initial compliance, depending on firm size.
Ongoing monitoring, testing and remediation work on companies' internal controls has led to continued consulting opportunities, even after compliance. Adoption of similar rules by regulatory bodies around the world has prolonged this consulting boon.
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