VideoSarah Johnson, CFO.com | US
January 8, 2008
- Alternatives to the Big 4
As the CFO of the fastest growing technology company in CT, I too dumped a Big 4 firm in favor of a tier 2 firm. I cut 42 to 50% off the audit expense while actually getting better continuity through retaining the senior manager who moved from the Big 4 firm to the tier 2 firm.
I have managed 8 changes of accounting firms in the past 18 years, both from and to "the Bigs". Moves are dictated by the unique circumstances of the company, the services one can expect to receive, their value, and the costs thereof. No one answer fits all; however, there are right judgments to be made. While there are many intangibles and the expected working relationship with the engagement partner and manager is a key component in the decision, I have still found that the decision among the accounting firms can be quantified into an expected net present value of the value of their services less their costs.Posted by John Henrie | Jan 24, 2008 6:07 PM ET
- Value Added for Small Firms
It is a myth that the Big 4 always have higher quality and add more value. For smaller companies, it makes sense to engage small or medium size public accounting firms for at least two reasons. The obvious one is the lower cost. In addition, those public accounting firms have more experience with, and better knowledge of, the needs of smaller clients. Thus they are in a position to add more value.
Posted by Zafar Iqbal | Jan 10, 2008 3:20 AM ET
- What about the value add?
It makes sense to cut down costs when the company is not doing well.However,quality needs to take precedence over quantity.Will the new firm be able to deliver the same quality as Deloitte? Will the new firm be able to bring the same value to the table as Deloitte always does for its clients?Only time can tell the truth!!!
Posted by Venkatesh Bakshi | Jan 9, 2008 9:51 AM ET
- No to Big 4
A company with $102 million in market capitalization shouldn't have gone for a big 4 auditor in the first place. A local firm would do a far better job- as they would have handled many similar cases- at a fraction of the price.
Posted by Kunal Ganguly | Jan 9, 2008 7:51 AM ET
- Beyond the Big 4
It is nice to know tht some companies are looking for alternatives to the big 4.
Posted by Wael Bibi | Jan 9, 2008 2:44 AM ET
- modual firms save
By breaking up our outside accounting needs into basically two main groups and shopping each group to accounting firms to bid we saved a large percentage in fees. We are required to have a B4 auditor, but we use a local firm for tax. It works for us.
Posted by Milton Bulloch | Jan 8, 2008 5:19 PM ET
