Accounting Faces Crisis of Competence, Not Integrity; "Andersen-itis" Isn't What Ails the Industry.Business Editors NOTE TO MEDIA: Two charts are available in a Smart News Release(TM) on Business Wire's Home Page at www.businesswire.com and at www.newstream.com NEW YORK--(BUSINESS WIRE)--April 9, 2002 NFO NFO Info File (file type extension) NFO New Fund Offer NFO National Farmers Organization NFO Naval Flight Officer (US Navy) NFO National Family Opinion WorldGroup Survey Discovers the Accounting Profession Can Raise its D Grade for Client Relationships By Getting Back to Basics and Improving Performance and Value ARF Annual Convention, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Hilton--The accounting profession is in a crisis, but the root of the problem isn't fallout fallout, minute particles of radioactive material produced by nuclear explosions (see atomic bomb; hydrogen bomb; Chernobyl) or by discharge from nuclear-power or atomic installations and scattered throughout the earth's atmosphere by winds and convection currents. from the Andersen/Enron scandal. The real cause for concern is a crisis of competence that is eroding customer satisfaction with external auditors The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. in corporate America, says an April 2002 survey of companies that purchase outside accounting services conducted by NFO WorldGroup, one of the world's leading providers of research-based marketing information and counsel. Using the NFO TRI TRI Toxics Release Inventory (US EPA) TRI Touch Research Institute TRI Taux de Rentabilité Interne (French: internal rate of return) TRI Taux de Rentabilité Interne TRI Tile Roofing Institute *M Index, an innovative relationship and reputation management tool, businesses using outside auditors give the profession an overall performance score of 61 equivalent to a D grade. By comparison, general B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business services average 80 (B). Top performing businesses with the strongest relationships fall in the range of 90 to 100 (A). This low rating is reflected in client evaluation of auditor performance. 55% of the respondents ranked overall performance of their auditor as excellent or very good, compared to 70% to 75% typically seen in the professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . Similarly, only 55% said they definitely or probably would recommend their auditors to business colleagues, versus 75% to 80% for the professional services category. "These weak scores should be a clear warning bell that the accounting profession has serious, fundamental client relationship problems that are different from the issues dominating the headlines about Andersen and Enron," explained Shubhra Ramchandani, Stakeholder stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property. Management Practice Leader for North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , NFO WorldGroup, and leader of the TRI*M study. "The problem isn't integrity - it is value. Most clients rate their outside accountants' business ethics business ethics, the study and evaluation of decision making by businesses according to moral concepts and judgments. Ethical questions range from practical, narrowly defined issues, such as a company's obligation to be honest with its customers, to broader social very highly, but what they question is the performance and value of the services they receive. The NFO TRI*M research reveals some vital insights into what the profession can do to raise its D grade to an A for customer satisfaction and loyalty." According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the TRI*M results, the respondents gave HIGH performance marks to auditors in regards to: - "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" - "Is 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" However, the industry scored AVERAGE to BELOW AVERAGE on critical performance factors like: - "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" - "Is 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" "We're seeing a clear demand that auditors get back to basics, to shore up their core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
An example of the drive to get back to basics is corporate clients' perception of combined auditing and consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" . 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 non-auditing services to their company, but 27% would not and 42% were unsure or undecided - a division that suggests the topic is far from clear for corporate decision-makers. 50% of the companies surveyed said that they are currently using auditing and consulting from the same vendor. This indicates a strong probability that businesses will re-evaluate and possibly begin separating their suppliers of audit versus consulting services, regardless of actions taken in the regulatory arena. The scores are based on NFO's recent survey of American corporations, zeroing in on top managers and executives with responsibility for managing auditing and consulting relationships with outside accountants. The results of the survey were compared to the NFO TRI*M database comprising results from more than 1,500 studies and 2.6 million interviews across all business sectors. About NFO TRI*M NFO TRI*M is the ultimate research platform for gaining deeper insight into important relationships. NFO TRI*M has been proven in hundreds of engagements around the globe. A breakthrough in relationship measurement and management, NFO TRI*M enables executives and researchers to understand customer complexities, prevent customer "leakage" and secure a high level return from company customer satisfaction programs. NFO TRI*M may be applied to a full range of stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. , including customers, trade partners, employees, and shareholders. About NFO WorldGroup NFO WorldGroup is one of the world's leading providers of research-based marketing information and counsel. "Marketing minds specializing in research" (TM), NFO has facilitated Fortune 500 clients' business decisions for more than 50 years by providing in-depth knowledge and understanding of consumers and brands through research. Their services include comprehensive counsel on market evaluation, product development, brand management, customer satisfaction, pricing, distribution and advertising effectiveness. NFO is a worldwide leader in Internet-based research and maintains one of the world's largest Interactive panel communities. They are one of The Interpublic Group of Companies This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. (NYSE NYSE See: New York Stock Exchange : IPG IPG Implantable pulse generator, see there - news), and have majority-owned operations in 40 countries. Visit NFO WorldGroup on the web (www.nfow.com), and learn more about NFO TRI*M Stakeholder Management Services (www.nfow.com/trim). Note: A Photo is available at URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : http://www.businesswire.com/cgi-bin/photo.cgi?pw.040902/bb7 http://www.businesswire.com/cgi-bin/photo.cgi?pw.040902/bb7a NOTE TO EDITORS: In the name NFO TRI*M noted in this news release, there is an asterisk (1) See Asterisk PBX. (2) In programming, the asterisk or "star" symbol (*) means multiplication. For example, 10 * 7 means 10 multiplied by 7. The * is also a key on computer keypads for entering expressions using multiplication. between TRI and M. This symbol may not appear properly in some systems. |
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