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Who Will Provide Global Immigration Services In The Future?
Business Immigration Quarterly, Fall 2002
P. Robert Thompson
Many companies have historically relied upon the big accounting firms to
provide non-U.S. management of human resource and global immigration
services. In many respects, the big accounting firms provided “one-stop”
shopping for human resource management issues. This situation, however, is
about to change.
In response to the recent “difficulties” experienced by Arthur Andersen and
the other big accounting firms, Congress passed the Sarbanes-Oxley Act of
2002 (H.R. 3763) on July 30, 2002. This is a far-reaching Act that
introduced significant public accounting oversight and corporate governance
reforms to the industry. The provisions most important from an immigration
perspective are the prohibition of “non-audit services” by public accounting
firms. These prohibitions include:
 Management functions or
human resources;
Legal services and expert
services unrelated to an audit; and
Any other service that the
new Public Company Accounting Oversight Board determines is impermissible.
It is first important to note that no implementing regulations have been
issued to date. Indeed, it is unclear whether such regulations will be
issued before the imposed prohibitions are to take effect.
Despite this fact, we believe that there is a significant likelihood that
public accounting firms will be unable to continue to provide global
immigration services absent express consent by their client companies’
auditing committees. We believe that the regulations will ultimately find
that immigration services are either “management functions or human
resources” or “legal services and expert services unrelated to the audit.”
Unfortunately the lack of eminent regulatory guidance puts companies in a
difficult position:
Do they do nothing until
the regulations are issued?
Should they commence
discussions with their audit firm currently providing immigration services
about this issue?
Do they go to their boards
and request consent to continued immigration service provision by their
auditors at this time?
Do they commence the
process of exploring alternate service providers?
We do not endorse the first option. But rather believe that the second,
third and fourth option should be pursued vigorously. Most responsible audit
firms are likely to have already brought this matter to the attention of
some company executives or attorneys. Some audit firms are contemplating
discontinuing their immigration service practice or divesting of it. Your
company’s audit firm may already have a transition plan. Ask them!
Independently, management itself needs to decide whether the continued
representation by the firm’s auditors is a matter to be brought before the
board. If a company is receiving outstanding value and service from their
audit firm, a plan to consult the board should be implemented sooner than
later. Getting board approval can be a complex and time consuming matter. We
believe that many boards, in the current environment, will not approve of
the continued provision of immigration services by the firm’s auditors.
Therefore, the process of interviewing alternative service providers,
soliciting RFP’s and evaluating proposals may need to commence shortly.
A year ago, no one would have anticipated the demise of Arthur Andersen.
While a regulatory interpretation of Sarbanes-Oxley is not yet available,
the spirit of the legislation is clear. By anticipating the law’s likely
interpretation, companies can avoid the tumultuous consequences of being
forced to switch service providers on short notice or worse being found in
violation of the Sarbanes-Oxley Act.
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