In my comments about the consulting activities (or lack thereof) in the other three of the Big 4, I often give Deloitte the benefit of the doubt about the maturity of their practice. After all, they didn’t sell it, and the others probably think that was a good decision. Or do they?
In any event, with the myriad of issues they all have, it is an even bigger burden to have that consulting temptation right next to your audit business, in full bloom and to have to manage the independence issues. As far as I know, Deloitte has not been chastised by anyone for not adhering to independence standards. But then again, the ways of the PCAOB and SEC are often secretive.
Vinnie Mirchandani over at blog, Deal Architect reminds me that even with regard to Deloitte, it’s important to remember that they are an audit firm first. I’ve also heard that audit still does take precedence over there, with the consulting activities never taking first priority over what the audit partners want. And so they have avoided the ego problems of Andersen Consulting and the coming travails of firms like PwC that even with all their independence consult staff, can’t do a simple search of public information. Or maybe in any firm, there’s a struggle to squeeze more cash from SOx…Those investment company complexes are a little tricky, too… But then again, all the information is publicly available to be able to make the right decision or at least the risk averse decision.
Vinnie points out, “…Talking about accounting firms, I was talking recently to somebody about Deloitte. It is the only large accounting firm which did not spin off its consulting business. And in its consulting business continues to advise clients about software evaluations, while running an SAP implementation practice. Even more annoying to some of its services competitors, it also has an IT outsourcing and BPO advisory practice – it helps clients evaluate firms it competes against in the field. Deloitte has a battery of lawyers and Chinese Walls to keep its conflicts from getting out of hand. It even has a Chief Ethics and Compliance Officer but I can imagine how busy he stays mediating conflicts of interest…”
Right on Vinnie!