Will the most significant development on Wall Street in decades, turn out to be a looming disaster for the audit industry? Nasdaq today has launched a private stock market for the super-wealthy investors called the portal market. In this new market, private firm can raise money by selling stocks to an elite group of shareholders without making public their financial statements or submit to federal regulation, such as the Sarbanes-Oxley corporate accountability law. Goldman Sachs, Merrill Lynch, Lehman Brothers and Citigroup are also setting up rival private stock markets of their own.
It definitely sounds like good news to Corporate America as there are now more avenues of raising funds without having to pay big audit and compliance fees. Be sure that there will be an increasing trend for big public companies to move away from the rigorous requirements of the public market to that of the “no strings attached” private ones.
Audit Partners’s big fat package will be SQUEEZED as either (1) the public market lobbies for lower level of regulations to retain its competitiveness or (2) a big movement of public companies to the private exchange. Help! Someone please start lobbying for more regulations on the private markets because audit and compliance are positive externalities which will safeguard the investors’ welfare and most importantly our audit partners’ pockets.
Techno Bunny
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