Mark Blumkin, PWC practice director, notes that project cost overruns were a frequent red flag for the auditing side of the business. We helped owners set up an organization, a process and internal controls. The firm's role has since come to include overall project management, including selection of engineers and contractors. Mangement firm executives admit they can benefit from their parent firm's auditing relationship with major corporate clients. But they add that they have to market services internally as well and are not guaranteed consulting work.
Some observers say the firms' accounting and consulting businesses can create conflicts of interest.
The U.S. Securities and Exchange Commission last year began pressuring the accountant-consultant firms to split those businesses to avoid compromised audits. Most have done so, but the separations have also netted the sellers large sums of money. Arthur Andersen's consulting business broke off last year and began operating Jan. 1 as Accenture in a Superbowl-hyped marketing blitz. Consultant executives say that audit and consulting businesses remaining under the same roof are kept at arm's length and clients may be turned away if conflicts are found. We don't take this lightly.