What problems do you think professional services firms are facing today?
It's not the workload - they like the workload, they can charge for it.
The problem is conflicts of interest. The PS firms aren't allowed to offer advisory services as well as audit to the same company as they would effectively be auditing themselves. Have a look at the Enron scandle for more info.
Ok, so I guess the main problem facing PS firms today is the massive increase in work they are performing due to SOX regulations. Which in turn has caused problems to say KPMG because it is very time consuming and so has caused resource allocation problems for KPMG? Which has also led to the firm dropping some of its smaller clients!
Sound about right?
But wasnt this introduced in 2002? Its been 6 years now, surely they firms have learnt to cope with this additional workload?
Search this forum for Sarbanes-Oxley. At my interview, the interviewer started nodding immediately when I said this, you really have to know about it.
Couple of points to be made on it that aren't mentioned - while it has increased the workload (and hence fees) of audit firms, it is an additional burden on the firm in question. This increase in costs could potentially make some firms (that are borderline in their viability) go bust, thereby decreasing the amount of work for audit firms. Ergo it's a balancing act and it will be interesting to see if SOX is reduced in strength in the future.