What economic impact does the list of prohibited services have on the accounting profession as a whole?
Services not banned outright by SOX Section 201 and the SEC rules may be permitted if auditors jump through the right hoops. If a service isn’t on the prohibited list, such as tax services, for example, it’s permitted if the auditor gets permission from the client’s audit committee before doing the work. The SEC rules require that the company disclose on its financial statements any fees it pays to its auditors. Companies must separately disclose fees they pay their auditors to perform audit and non-audit services. Tax services are one area in which audit firms have been given some leeway. Generally, an audit firm may give tax-planning services and advice to a client but can’t represent the client in a pending tax proceeding.
