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News and Events » Commentary: Who audits the ?Big Four? auditing firms?

Making life uncomfortable for masters of the accounting world is in the public interest, says one observer at the Financial Times.
LONDON: How tough can life really be at the top of a “Big Four” auditing firm?
You inhabit a world where not only must customers by law buy your product, but, happily, one where the most lucrative also seem wedded to dealing with only the biggest practices — whether out of snobbery, the need for international audit coverage, or just the nebulous sense that investors might otherwise disapprove.
The one nightmare you have is that a giant accounting scandal could somehow bring retribution. Your size and reach makes you a tempting target.
But even here, that same oligopoly rides faithfully to the rescue. Since the demise of Arthur Andersen — the fifth pillar of what was until 2002 the big five accountants — the authorities have helpfully thrown a cordon sanitaire around the survivors, fearing the descent into an even more dominant big three.
It is why when KPMG was found to be peddling illegal tax schemes in the US in 2005, it was let off with no more than a slap on the wrist by the authorities.
Or why the whole big four — PwC, EY, KPMG and Deloitte — emerged from the furnace of the financial crisis with just a minor singeing.
There is, however, one nagging blot on this landscape. Each successive scandal raises the same awkward questions. Does this comfortable structure really promote audit quality?
And by allowing a few giant firms to dominate the profession; has control of this systemically important industry been handed to a few self-interested actors — concerned mainly with preserving their own privileges rather than promoting the public good?
The collapse of the British outsourcing firm Carillion is the latest scandal to cause these worries. Despite absorbing expensive advice and assistance from all of the big four at a princely cost of £51m over a decade, its failure has been dominated by allegations of financial misreporting.
Read more at https://www.channelnewsasia.com/news/commentary/who-audits-the-big-four-auditing-firms-10283118

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