Booting the Big 4
Tired of sky-high fees and skimpy service? Smaller audit firms can give you the personalized and professional attention you're seeking.
Conventional wisdom dictates that if your company is public or you have designs on the public markets, the Big Four seal of approval is a must-have. Heeding that logic, for decades, entrepreneurs have been twisting themselves into pretzels trying to get onto the client list of one of the top accounting firms, eagerly trading personalized attention and service for alleged Wall Street cred.
These days, it hardly seems worth the trade-off. For one thing, fee hikes at the Big Four have made the sacrifice difficult to justify. "They've doubled their workloads and are making a ton of money off of Section 404, [the Sarbanes-Oxley requirement that companies set up internal controls for financial reporting and then assess their effectiveness]," says Colleen Sayther Cunningham, president and CEO of Financial Executives International, a Florham Park, New Jersey, professional association for senior-level corporate financial executives. FEI left a Big Four firm in 2004 after being presented with a 55 percent audit fee increase. For a nonprofit, she says, the hike was prohibitive, so they went with a regional firm instead. "It was a good thing for us," she says. "We're saving money, and we're getting as high-quality an audit, if not higher, as we had before."
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