Amidst their recent gains, the Big Four audit firms are under siege; attacks from unanswered and uneasy questions regarding their quality of audits after a string of high-profile corporate collapses. It’s even to the point the Financial Reporting Council, the accountancy regulator, is starting to act.
FRC chief executive, Stephen Haddrill, is holding the Competition and Markets Authority (CMA) accountable to view “audit only” firms in a bid to enhance competition because the Big Four and their large fees are proving that there is a high amount of anti-competitive activities; a job that this department of government is responsible for reducing.
But what is signaling the competition authorities for the potential break-up of The Big Four, is not the collapse of small firms, but the devastation of the government contractor, Carillion, backed up in a damning 100-page report on Carillion’s failure, and the failure in multiple responsibilities. There became a loss of confidence in the audit industry after important members start acting entirely in line with their own personal incentives, so now commissions are introducing some remedies to try and encourage more competition; and another look at the audit market is what they really need.
The Big Four – Deloitte, EY, KPMG, and PWC – are staring down at a new-building resistance, by the FRC and by the Competition and Markets Authority.
And to know more about The Big Four, click here.
To read more about Deloitte, click here.
A Resistance
11
Sep2018
