Securities and Exchange Commission Hearing on Auditor Independence
Sept. 13, 2000
Grant Thornton's strategic focus is on middle-market, entrepreneurial companies, which often lack the internal resources of the Fortune 1000 and rely on advisory services provided by their independent accountants. In our view, middle-market companies would be adversely affected by any reduction in the scope of services that their independent accountants are permitted to provide.
Audits enable independent accountants to gain a better understanding of the business and financial issues affecting middle-market companies. As a result, independent accountants are able to render more useful and more cost-effective advice. In addition, advisory services enable independent accountants to perform more effective audits. The institutional knowledge that independent accountants gain and the lower fees that middle-market companies pay for advisory services provided by their independent accountants both help protect the interests of the investing public.
In his testimony, Dom Esposito will provide the Commission with specific examples of advisory services middle-market companies ask their independent accountants to provide. These include the following: Evaluation and adoption of accounting policies; assistance with financial statements and complex disclosure requirements, earnings-per-share computations, and accounting issues associated with business combinations; advice about financial and management software; and services related to corporate growth, such as advice relating to strategic planning and performance improvement.