The CPA Journal

Improving the Profession’s Grade Means Returning to Basics

A recent survey showed that although the integrity of the accounting profession is not questioned (the Enron/Andersen scandal notwithstanding), overall customer satisfaction has been neglected. The survey, conducted by NFO WorldGroup and released in April, shows mixed feelings about the virtues of using the same vendor for both auditing and consulting. Highlights include:

High marks to auditors for trust, commitment to personal ethics, and business integrity.

Low scores on performance in experience, ability to rely on staff, responsiveness/dedication, and competency in understanding financial structures.

The study surveyed companies that purchase outside accounting services. The results were compared to a database of results from more than 1,500 studies and 2.6 million interviews across all business sectors.

The results showed that businesses using outside auditors give the profession an overall score of 61 (a D grade). General business-to-business services averaged 80 (B), and top performing businesses with the strongest relationships fell in the range of 90 to 100 (A).

The low rating is reflected in client evaluation of auditor performance. Fifty-five percent of the respondents ranked overall performance of their auditor as “excellent” or “very good,” compared to the 70–75% typically seen in survey results for professional services. Similarly, only 55% said they definitely or probably would recommend their auditors to business colleagues, versus the 75–80% typically seen for professional services.

Respondents did, however, give auditors high marks on the following statements:

Employees that are committed to personal ethics

Culture of business integrity

Commitment to maintaining a position of independence as an auditor.

Auditing were rated as “average” to “below average” on the following statements:

Expertise in my industry

Has a staff we can rely on for providing the right advice

Has a staff that is responsive to our needs

Dedicated to being a reliable advisor for the financial aspects of our business

Capability to provide expert advice and insights on business risks associated with accounting treatments

Has a staff that is competent in understanding complex financial structures used by some businesses

Competence in recommending the right level of financial controls

Readiness to address auditing needs in an environment of changing regulations

Provides solutions to help us make business decisions that are in the best interests of our company and its shareholders

Has the confidence of investors for providing appropriate disclosure to flag business risks

Is well prepared for the future

Communicates with us effectively.

The survey indicated mixed feelings about the virtues of using the same provider for both auditing and consulting. Results showed that 35% of the respondents would recommend using their current outside auditor for nonauditing services to their company, but 27% would not; 42% were unsure or undecided. This division may suggest the issue is far from clear for corporate decision-makers. Fifty percent of the companies surveyed said that they are currently using auditing and consulting from the same vendor, suggesting a strong probability that businesses will reevaluate and possibly begin separating these relationships, regardless of any future regulatory actions.

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The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.