HOME2019-05-31T17:07:24-05:00

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The Big Four – Auditors or Consultants?

Over the decades I have worked with the Big Four Accounting firms in a variety of roles. Heck, some folks in the firms used to refer me to their audit clients that needed eDiscovery/IG process and system consulting.  The line between auditor, accountant and other professional services was simpler before the firms started buying or building eDiscovery service bureaus.  Given the volume based industry pricing models (i.e. $/GB costs) you cannot blame them for acquiring the people and technology to conduct their own investigations during audits or on request.  They ran into the same eDiscovery service bureay trap that AmLaw 200 firms fell into twenty years back.  Once you build sufficient burst capacity to meet client’s emergency requirements your teams sit around twiddling their thumbs most of the time.  Companies and independent departments follow the First Rule of Nature just like people.  To justify their teams, eDiscovery Managers start to sell services outside of active audits.  I have not problem with KPMG competing for new service customers in the broader eDiscovery market.  I draw a careful line when the customer is an audit or attestation client.

For services required to conduct their audit, a client should have the right to use their services or bid out the work to a mutually agreeable provider.  That seems pretty straight forward as long as the audit client is a savvy buyer and has full disclosure on internal/captive service bureaus.  But should a firm sell legal services to their audit clients that are not related to the audit process?  Can their smart consultants design the very financial information systems that are relevant to audits?  Since legal response systems are part of the company’s risk management infrastructure, they do seem to fall under the audit scope as well.

I pose these questions to validate or challenge my own non-attorney, non-CPA opinion that this is that ‘careful line’ that distinguishes conflict of interest vs. fair competitive services.  Although there are lots of articles on the Big Four getting too cozy with their clients or involved in politics, I did not find any that explored this area.  Instead, I will invite your comments and opinions with the SEC’s rules that seem to cover this.

Specific Prohibited Non-audit Services

The auditor is prohibited from providing the following non-audit services to an audit client including its affiliates:

    • Bookkeeping
    • Financial information systems design and implementation
    • Appraisal or valuation services, fairness opinions, or contribution-in-kind reports
    • Actuarial services
    • Internal audit outsourcing services
    • Management functions or human resources
    • Broker-dealer, investment adviser, or investment banking services
    • Legal services and expert services unrelated to the audit

In addition to the specific prohibited services, audit committees should consider whether any service provided by the audit firm may impair the firm’s independence in fact or appearance.


Greg Buckles wants your feedback, questions or project inquiries at Greg@eDJGroupInc.com. Contact him directly for a free 15 minute ‘Good Karma’ call. He solves problems and creates eDiscovery solutions for enterprise and law firm clients.

Greg’s blog perspectives are personal opinions and should not be interpreted as a professional judgment or advice. Greg is no longer a journalist and all perspectives are based on best public information. Blog content is neither approved nor reviewed by any providers prior to being posted. Do you want to share your own perspective? Greg is looking for practical, professional informative perspectives free of marketing fluff, hidden agendas or personal/product bias. Outside blogs will clearly indicate the author, company and any relevant affiliations. 

By |May 31st, 2019|Categories: Provider, Global, Regulations, Compliance, United States, Essay|0 Comments

How to Offend Your Hosts During An Interview

Back at LTNY in February I put the word out that I was going to relaunch eDiscoveryJournal.com.  I pushed back briefings, webinars and interview requests with the “when it is live” excuse.  When Joe Bartolo and Bard Schaffel asked to interview me for their  EDRM podcast series, I ‘thought’ that surely I would have the new site live by then.  So most of you will be reading about this well after the interview has already been edited and published.  I enjoyed the good questions and they forced me to codify some thoughts that I have had for a while. One question that hit a nerve used the ubiquitous ‘best practices’ phrase.  After seeing the sales sausage made, I now believe [...]

By |May 13th, 2019|Categories: Market, Analytics, Academic, Privacy, Essay|0 Comments

Meet Your Editor – Greg Buckles

CSI Days Way back in 1989 I escaped Rice University with a bachelors degree in Chemistry and a burning passion for forensics. I started as a Criminalist for the Houston Police Department and volunteered for all of the dirty jobs that got me out of the lab and into the field. For a while I was that eager young fellow assigned to nasty meth labs, biweekly incineration runs and anything else interesting like computer drive acquisitions. As much as I loved the work, I quickly realized that the slow grind of civil service was not enough for the long haul. Lit Support Although I had never been a 'techie', computer forensics got me interested in programing, web development and database [...]

By |May 6th, 2019|Categories: Essay|0 Comments

eDJ – How did we get here?

To understand the aspirational purpose of the new eDiscovery Journal it helps to understand how we got here. Way back in the late 1990's litigation support and eDiscovery was just getting started. There were not many of us wrestling with the first versions of Summation, iConect, Encase and IPRO imaging. Duane Lites started the Litsupport Yahoo Group where we lonely pioneers helped each other wrestle with corrupt .DII files, massive image collections and the first discovery on email. At some point I became a moderator on The List as it slowly grew to over 9,000 peers. Members generally quit posting questions or answers when we realized that every provider was mining The List for email addresses. Post a question about [...]

By |May 6th, 2019|Categories: Essay|0 Comments

Email Greg Buckles with questions, comments or to set up a short Good Karma call. For more information visit the eDJ Group website.

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    Essays, comments and content of this site are purely personal perspectives, even when posted by industry experts, lawyers, consultants and other professionals. Greg Buckles and moderators do their best to weed out or point out fallacies, outdated tech, not-so-best practices and such. Do your own diligence or engage a professional to assess your unique situation.