Auditors graded 'D' by NFO Index

As if the recent accounting scandal with Andersen/Enron was not damaging enough, this week brings more bad news for the profession. The latest NFO WorldGroup survey of US businesses with outside accounting has found greatly eroded levels of customer satisfaction.


The survey was based on NFO's TRI*M Index, a performance indicator scoring businesses across a range of criteria. On this scale, auditors' clients give the profession an overall score of 61 - or the equivalent to a grade D. By comparison, service companies in the general B2B sector usually score an average of 80, or grade B. Top-performing service companies tend to score in the range of 90 to 100, or a grade A.

The low rating is also reflected in the clients' evaluation of their auditors' performance. Over half (55%) viewed the performance of their auditors as excellent or very good, compared to the 70% to 75% more typically seen among the professional services. Similarly, only 55% said they definitely or probably would recommend their auditors to business colleagues, versus 75% to 80% among the general professional services.

The survey indicates mixed corporate attitudes towards using the same provider for both auditing and consulting. The survey results showed that 35% would recommend using their current outside auditor for non-auditing services to their company, but 27% would not. A further 42% were unsure or undecided - a division that suggests the topic is far from clear for corporate decision-makers. Half had previously claimed that they are currently using auditing and consulting from the same vendor.

Shubhra Ramchandani, NFO's TRI*M study leader, explained 'These weak scores should be a clear warning bell that the accounting profession has serious, fundamental client relationship problems that are different than the issues dominating the headlines about Andersen and Enron. The problem isn't integrity - it is value. Most clients rate their outside accountants' business ethics very highly, but what they question is the performance and value of the services they receive. The NFO TRI*M research reveals some vital insights into what the profession can do to raise their D grade to an A for customer satisfaction and loyalty.'

Ramchandani also observed, 'We're seeing a clear demand that auditors get back to basics, to shore up their core competencies and concentrate on delivering fundamental value to their corporate clients. The accounting industry has concentrated on expanding its portfolio of services, such as consulting and international support, but these do not appear to be what is motivating clients to continue their current external auditor relationships. The crisis of competence will continue to affect the accounting industry long after the big headline controversies become old news.'

The scores are based on NFO's April 2002 survey of managers with responsibility for auditing/consulting relationships with outside accountants in the US. The results were compared to NFO's previous results from 1,500 US studies and 2.6 US million interviews across all business sectors.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.