Current issues


#1

Hi, i have a final round interview next week with a mid tier firm (GT) and I was wondering if anyone could help me. I’m aware of the current economic issues, I’m just struggling on how to relate them to the company. Also, I have heard of the Sarbanes-Oxley Act and was just wondering how that may be affecting the company? Sorry to be a pest :stuck_out_tongue:

Any help would be greatly appreciated :slight_smile:


#2

Hello!

For Grant Thornton, well accounting companies are not affected by economic conditions in quite the same way as banks; accounting companies make pretty steady money whatever the weather, especially an audit firm like Grant Thornton. An obvious one you can talk about is the credit crunch; this will not affect Grant Thornton as much as it will affect its clients. As a result of the increased cost of borrowing, companies will have less money to invest and people have less money to spend on the high street, resulting in a general economic slow down. The increase in interest rates was done to help slow down inflation; prices rise faster in a hotter economy.

The Sarbanes-Oxley (also known as SARBOX or SOX) was a new set of rules that came in after the ENRON scandal. It is a large number of rules which companies that are AMERICAN or have AMERICAN branches, especially those registered with the SEC must follow. The audit company, in this case Grant Thornton, must submit as part of their audit that allow Sarbanes Oxley rules have been followed. Doing SARBOX work is a lot more work than just another audit, so for the audit company, Sarbanes Oxley has become almost a license to print money.

It so turns out that since SOX was introduced, it has to much red tape, and they will be reducing the amount of requirements… this means that there is less work for the audit company to do, therefore less money to be made.

THe primary purpose of Sarbanes Oxley is to test and document what measures (controls) a company is taking to ensure there is no fraud in their business… in other words, to prevent an Enron disaster from ever happening again.


#3

Hey thanks for that :slight_smile: So it doesnt really affect them in a bad way? Well, not much to talk about at the interview? I got told that the current situations would be an opportunity for accounting firms?


#4

I’d say Sarbanes-Oxley is definately the largest thing to happen to the accounting/auditing industry in recent years; it means a lot more work for auditors, so generally speaking their income has risen as a result.


#5

Ok thanks :slight_smile: