Rates for SOX work 1056
jcunningham last edited by
I agree with all who have provided input regarding this subject matter. But regardless of color, one should NEVER accept a sox engagement that is far below the average. %0AAnd Jennifer, I tip my hat to ya. I agree 100% with regards to firms (those who last name is hard to pronounce, but their first name is always american) who have no clue the market rates and insists on trying to get you for low ball rates.
Without stepping into the debate over SOX rates, what is considered ‘market’ rate, etc., I thought it might be helpful and a value-add to identify some (please note that the list below is not complete, just examples) core competencies for SOX professionals.
Consideration of the SOX Core Competencies could then be used to determine if the charge rate is appropriate and is justified for the services performed.
SOX Professionals should be able to:
Internal Controls Understanding:
Explain the role of internal controls in an accounting system
Describe management’s responsibility and reasons of maintaining accounting systems with sound internal controls
Explain the need for internal control and the potential results of poor controls
Describe the features of a sound internal control system
Describe the inherent limitations of internal control systems.
Explain and design an effective internal control system.
Iinternal Controls Procedures:
Identify the activities involved in, and the accounts affected by each of the transaction cycles listed below,
Implement (Design) a system using appropriate operating procedures ineach of the transaction cycles, and
Identify the internal control objectives for each of these transaction cycles:
-Purchases and accounts payable
-Inventory and production
-Sales and Accounts receivable
-Cash and bank balances
Has anyone developed a SOX Core Competency Table or a Skills Assessment Questionnaire that can be used as an aid to assess the competency of a SOX professional?
I would expect a rate of USD125 per hour, but client prefers to pay that rate to Jefferson Wells, Lucas, Solomon Edwards, Resources Connections and the Titus Group. When we approach them, they wanna pay us at USD70 per hour at the maximum. I would prefer to be employed at the client place (Manager) rather than take a risk of one night stand contracting.
USD125 per hour is worth the risk. But no no to USD70 per hour.
I don’t see the value of posting charge rates quoted, paid, or otherwise, on the Forum as the billable rate is entirely determined through contract negotiation, the client’s perceived value, the competency of the SOX professional(s) performing the work, regional factors, and other considerations.
A SOX professional may agree to take a lower rate if the engagement requires less travel, enables him or her to perform work remotely, or the contract contains other performance incentives. Similarly, the same individual might not be willing to accept the same rate if some or all of these conditions are not present. Other qualitative factors might also influence the decision–the reputation of the company, skill of other professionals performing the work, depth of assistance needed, etc.
In short, it seems a pointless discussion to rattle off charge rates, individual circumstances. etc., with hope of achieving some financial benefit–will any person who reads the postings and discussion thread approach the client to demand a higher rate?
…seems a fruitless discusson. That’s why I tried to salvage it by requesting SOX professionals if they had any insights about SOX core competencies. That seems to have a direct bearing on the charge rate and be establishing a common denominator for performing SOX work and adjusting it based on regional differences, it might be easier to compare SOX rates amongst the professionals performing the work.
I agree with you on that.
I was putting across a point that whatever a Sox Professional deserve is not getting at the market place.
SOX consulting is still a risky proposition. 3 months you are consulting and two weeks you are on bench. And for that risk, USD70 is not a justifiable remuneration. Most of my peers here in the Chicago Land are really apprehensive and they are looking forward to be placed at client’s place permanently, instead of taking a risk by continuing to consult.
Frankly, I believe that rates would go down as more and more people get into SOX - age old story of supply exceeding demand. Therefore, leaving a job for SOX consulting may not be viable at this juncture.
Everybody is in a sustenance cycle now, so there would not be any Yahoo requirements whatsoever compared to 2004 and 2005, this would tend to bring down requirements for SOX consultants.
djwfutbol last edited by
With all due respect, I think you are dreaming. This business (SOX consulting and any other consulting, for that matter) is all about the money. The core competency is merely window dressing. Case in point, look at the revenue for the external firms and compare it to the job that they do and the competence of the people that they hire. My personal experience suggests that the maximization of revenue is what drives them. Why shouldn’t it drive us lone wolves, as well?
In my view, an open discussion of acceptable rates is highly appropriate for this forum.
As to the earlier comment from the executive recruiter that an all-inclusive rate allows the consultant to manage a budget as they see fit, I have to laugh. Only a headhunter could possibly say such a thing with a straight face. Suffice to say, I only do gigs where the t and e is picked up. Anything else is thievery.
cherylcato last edited by
David, thanks for your reply. I was really glad to hear your opinion of inclusive rates. I have a potential client right now pushing for one - first time I’ve had that request - and it has me stumped. Have been trying to figure out how it would benefit me after seeing the other post - glad to see that maybe I was right to begin with.
ALso agree with you that this IS the right place to discuss rates. If not here, where?
That’s not to say the disucssion on core competencies wasn’t valuable and useful, too. We definitely need both disucssions…at least I do.
Some of the other posts I’ve seen here are from the ‘temp’ sector - those who are using SOX contract work as a means to an end - that end being a permanent position - to borrow a phrase from the headhunters - ‘temp to hire’. (don’t anybody take that negatively - it is not meant to be a slam)
But some of us, like myself, are truly consultants. This is what I do - I am not looking for an employer - I am looking for clients. Right now SOX is the hot area in consulting - in my career as a consultant there have been other hot areas - system conversions, RTC work during the savings and loan scandals, etc. I am as much concerned about my core competencies as I am about my rates so I have found all of these posts helpful.
So the bottomline is that fellow professionals here should not accept anything less than USD100 all inclusive for Financial Controls SOX efforts and USD125 all inclusive for ITGC SOX efforts.
Know your worth folks.
Please note that second tier firms like BDO, Gladreys, Thorntons charge USD180 per hour and USD200 per hour respectively.
But, I beg to differ with Cheryl. Market is not that hot as was two years back. There is more demand for ITGC side compared to the financial side because of clients moving towards CSA’s. ITGC testing is more specialized therefore, cannot be covered under CSA’s due to lack of dedicated IT professionals at remote business units (normally outsourced).
Hi David / Cheryl,
Please do not be confused as I was not attempting to squelch an open discussion of rates to deliver SOX Advisory Services. I agree with you that this Forum may be an appropriate and useful vehicle to discuss rates or specific contract terms if one is interested to know current market conditions.
However, beyond a discussion of what some clients will reimburse (travel expenses, out of pockets, etc.) my point was simply to highlight that the determination of chargeable rate is a unique exercise, driven by market factors, the competency of the Consultant, the engagement requirements, regional factors, and other considerations. For this reason, I do not believe it is possible to compare chargeable rates easily to achieve meaningful or actionable results. Incidentals are simply that and insignificant to the big picture.
Consulting services by their very nature, are considered personal services. If you could not honor your client commitment, the client may not accept your sub-contracting the work to another consultant without obtaining prior approval.
As a Consultant, you are being paid for your individual contributions, professional competencies and abilities–your billable rate as accepted and negotiated in the marketplace, is ultimately the end result, like it or not.
It has been my experience that truly value-add consultants needn’t constantly seek out future consulting assignments. Yes, there are periods ‘in between’ clients that result in downtime and a go-getter will do all possible to minimize downtime. But when is the last time that you came across a SOX professional who was ‘on the bench’ who was fit for anything other than sitting as a ‘bench warmer’. The marketplace is mericlessly effective…ineffective Consultants are quickly weeded out of the SOX garden.
Effective consultants tend to ‘roll off’ one engagement to another with relative ease and irrespective of current market conditions. It is the Consultant’s reputation, engagement successes and client satisfaction that determines the next consulting assignment–not charge rate or specific reimbursement terms. The value performers are in this field not because it is ‘hot’ at the moment, but because he or she has demonstrated expertise in the subject matter supported by an exceptional portfolio of satisfied clients.
I applaud anyone with the tenacity and motivation (however misguided) to execute SOX implementations. However, I wouldn’t employee just anyone for a SOX implementation.
It was stated that external firms are in it for the money only and that the SOX professionals that they employee do not have the requisite skills and competency to carry out the work. A comparison was made regarding the current charge rates to the work performed and asserting that the professional abilities and core competencies of these persons is simply window-dressing.
I could not agree more. Yes, the rates charged by some firms is significantly more than the rates charged by the ‘lone wolves’. However, a consultant from a large service provider also brings with him or her, an assumption of risk that is borne by the professional services firm, reputation of the firm, and is supported by the firm’s other resources…methodology, frameworks, tools, etc. Often, individual Consultants do not have this support structure and depth, and therefore, will not command the same rate in the marketplace.
Additionally, the external firms have resources that can take on the resources requirements a large project (>10k hours). It is impractical for large companies to engage twenty ‘lone wolves’, each with a separate consulting contract, rate, terms, etc. It may also be difficult to attain strategic focus when resources are independently sourced. In short, the disparity in the billable rate reflects these real differences.
As for being driven by the lure of money only and maximizing revenue, I can only comment that money comes and goes. If you truly enjoy your craft, money is of secondary priority at best and will always come with consistent client successes and personal job satisfaction.
Next time, I prefer to be called a ‘doer’ not a dreamer. I dream sometimes, but my dreams ain’t about SOX.
Robert Half published a 2005 Salaries Study for Accounting professionals. It is pretty useful and contains adjustments based on regional factors. The document can be modified as appropriate to assess if you are commanding your worth as a SOX consultant.
Stephanie last edited by
I feel I should clarify my earlier comments. As a recruiter I simply (or not so simply at times) act as an alternate set of eyes and ears in the market place. I may be able to offer benefits and projects to consultants or lone wolves that they would otherwise source on their own or never come across. I offer the option of a rate and travel and incidentals OR an inclusive rate. If the consultant chooses one or the other that’s completely up to them. Some consultants find that they make more with an inclusive rate over their typically pay rate and travel and incidentals if the project calls for a considerable amount of OT. It’s very subjective and I’m not the one to make the call as to it’s validity for a particular consultant.
There was a comment to the effect that we’re all in it to make money and that is very true. We wouldn’t be having this conversation is it were not. I’m in it for more than the money as are a number of the consultants I come across. I enjoy what I do and tend to work with people who also enjoy what they do as a consultant and that’s really the key factor for me.
A discussion on appropriate pay rate and secondary service bill rates are something most of us could benefit from. It certainly can’t hurt. Rates are very subjection, quality of work and competency of the contractor is not.
Everyone has their own opinion on the subject of Executive Recruiters. I’m certainly not here to change anyone’s mind. If a consultant and the client find it beneficial to work through an Executive Recruiter than it’s a win for everyone; especially when the client needs a team of consultants with diverse disciplines’ to tackle their particular compliance hurdles.
Just another view on a very interesting topic.