The US Sarbanes Oxley legislation, which prevents firms from providing certain tax services to audit clients and imposes strict rules to ensure auditor independence, is forcing tax advisers in Germany to consider their career development options.
Nicole Looks, formerly head of value-added tax (VAT) at KPMG in Germany, who has just moved to Baker & McKenzie, the international law firm, gave the restrictions that Sarbanes Oxley imposes on accounting firms as the reason for her move.
McDermott, Will & Emery, another US law firm, picked up a highly-respected team of tax lawyers from Deloitte-affiliated law firm Raupach & Wollert-Elmendorff in a similar move. Again, Sarbanes Oxley constraints were the main reason for the switch.
"There are restrictions on the work of accounting firms from Sarbanes Oxley," said Looks. "They have to obey strict rules of independence and this prevented me from doing all the tax work I used to be able to do."
Arnt Raupach, who took three colleagues with him when he moved to McDermott, Will & Emery on July 1 2004, agreed: "Sarbanes Oxley is a problem for our clients in several jurisdictions. I think the German legislation will move in the same direction in the future."
The Sarbanes Oxley legislation affects not only US companies, but their affiliates as well. In Germany, any multinationals that have a US company in the group is caught by the law and must obtain internal audit committee approval for any tax advice its auditor wishes to provide.
Looks, who had been at Baker & McKenzie until 1993 when she joined KPMG, began the task of building an indirect tax practice at the US firm's Frankfurt office on June 1 2004.
ITR Week welcomes your feedback on this or any other story. Please email the author with your comments. Letters may be published online.
