How do environmental changes impact the accounting profession?
Numerous changes in the environment make the practice of accounting and auditing much different in the new century than it was in the 1970s. For example, professional accounting firms now actively compete for clients by advertising extensively in various media, a practice that at one time was forbidden by their code of professional conduct. Mergers of clients have led CPA firms into mergers as well, such that the Big Eight is now the Big Five and the second-tier group has been reduced from twelve firms to about five. Another result of competition and other changes has been that some of the largest employers of CPAs now include income tax and accounting services firms such as H&R Block and an American Express subsidiary. Competition among CPAs also has led the SEC to expand its regulatory and enforcement activities to ensure that financial reports are relevant and reliable. From its inception, the SEC has had legal authority to prescribe the accounting principles and standards used in t
