Balancing act.(new consulting rules for accounting firms)

Big Five accounting firms find their footing in the wake of new SEC consulting rules

Once upon a time, accountants just audited companies' books and did their taxes. Now big accounting firms' management consulting arms often dwarf their accounting practices in size, scope and profitability.

In other words, the firms can both assess a company's financial health -- and offer help to make it better. That worries the Securities and Exchange Commission, which calls it dangerously close to a business auditing itself. As accountants become more deeply enmeshed in their clients' business, the SEC believes the temptation to twist the auditing numbers to gain or preserve lucrative consulting contracts could prove irresistible. And investors could lose confidence in the authority of audits.

After months of wrangling with the Big Five accounting firms, the SEC finally approved new regulations Nov. 15. The new rules will require companies to disclose how much they are paying for an audit, and how …