President Bush's crackdown on corporate shenanigans is aimed at large companies, but the fallout eventually could affect main street businesses, too.
Bill Woodward, an auditor and CPA for accounting firm Elliott Davis, said publicly traded companies regulated by the Securities and Exchange Commission would be most affected.
"However, as the regulatory environment reacts to the current situation, it could significantly impact all auditees," he said.
As with most regional accounting firms, Mr. Woodward's company primarily represents smaller, private companies that tend to be more conservative.
Elliott Davis' SEC specialist, Barbara Rushing, said public companies are more likely to engage in "risky accounting practices" because they place more importance on managing stock prices and maximizing earnings per share.
There are only a few SEC-registered companies in the Augusta area, mostly community banks that are also regulated by the Federal Deposit Insurance Corp. Unlike major corporations, their boards of directors are made up of investors whose major equity stakes in the company give them the incentive to make sure the business is run properly.
Tommy Wessinger, the president of Aiken-based People's Community Bank, said that he supports stricter standards to ensure confidence in the financial markets and that the vast majority of companies are operating aboveboard.
"There are hundreds, if not thousands, of public companies that do their job and do it right every day," he said. "You've got two bad examples that are giving everybody else a black eye."
Augusta-based real estate company Merry Land Properties Inc., the only local company whose stock trades on the Nasdaq exchange, said it welcomes stricter regulations because it has nothing to hide.
"We don't have a problem with what (Mr. Bush is) recommending - it's an open book here," said Dorrie Green, Merry Land's chief financial officer. "If a shareholder wants to see something, we'll show them whatever they want under SEC guidelines."
Merry Land is shopping for a new auditor. It's former auditor of record, the Atlanta office of Arthur Andersen, disbanded in the wake of the Enron fiasco.
Mr. Bush alluded to a the creation of a federal board to regulate the accounting industry.
"Up to now, we've been a self regulating industry," said Pam Jackson, a professor of auditing and accounting Augusta State University. "It looks like we're no longer going to be self-regulated."
Part of Mr. Bush's motivation is to restore investor confidence. Many local employers, such as Procter & Gamble and The Home Depot, fund portions of their employees 401(k) accounts with company stock.
Will Rogers, a certified financial planner for American Express Financial Advisors, said his clients have become more willing to diversify their employer-stock heavy retirement accounts.
"It used to be a fight a year ago. Now it's a two-word conversation: Enron, WorldCom," Mr. Rogers said, referring to the scandal-ridden companies whose stock free-fall caused its employees to lose their retirement savings.
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