PwC Reports Drop In Tax Work Since Sarbanes Oxley

by Mike Godfrey, for LawAndTax-News.com, Washington

25 September 2003

The Chief Executive Officer of big four accounting firm PricewaterhouseCoopers Sam DiPiazza told a Senate Banking Committee hearing on September 22 that his firm has experienced a 20% loss in tax work since the passing of the Sarbanes Oxley Act.

"Our tax practice has experienced a significant decrease in demand for these services from our SEC audit clients," DiPiazza told the Senate hearing held to monitor the progress of changes put in place by the recent legislation. "There seems to be a continuing drumbeat that auditors who provide tax services to audit clients are not independent," observed DiPiazza.

The US Securities and Exchange Commission adopted rules in January on the ability of audit practices to offer their clients non-audit tax-related services after the Sarbanes-Oxley Act prohibited accounting firms from performing many lucrative non-auditing services for their clients, in an effort to stamp out conflicts of interest.

Wording in the originally proposed rules which would have prevented auditors from offering many types of tax work was softened: tax planning services and tax advice are acceptable, but designing or recommending tax shelters for audit clients could raise problems, said the SEC.

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