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A new audit era: Big Four must account for themselves in CMA shakeup

  • ID: 4757942
  • Report
  • Region: Global
  • 14 pages
  • MarketLine
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FEATURED COMPANIES

  • Capita
  • Carillion
  • Deloitte
  • EY
  • KPMG
  • Mitie
  • MORE

A new audit era: Big Four must account for themselves in CMA shakeup

Summary

Accounting has been marred by a wave of failures, and in the wake of this the UK Competition and Markets Authority (CMA) has conducted a review of the market. A range of proposals have been put forward to combat challenges within the industry, in which the four largest auditors dominate and multiple barriers to entry prevent challenger firms from gaining a foothold. Concurrently, accounting as a discipline looks less and less effective at accurately reflecting modern businesses, and the field looks ready for reform.

Key Highlights

  • Provides an outline of a number of recent financial accounting scandals: Carillion, Capita, Mitie
  • Provides summary of recommendations from ongoing Competition and Markets Authority review
  • Outlines potential future four statutory audit market, given ongoing competitive review and changes in accounting practises.

Scope

  • Provides analysis of recent accounting scandals
  • Provides summary of an ongoing Competition and Market Authority review into the statutory auditing market
  • Evaluates likely impact of Competition and Market Authority review into statutory audit market - what is the future of the Big Four?

Reasons to buy

  • What is the future of the Big Four?
  • How will the statutory audit market change in the future?
Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • Capita
  • Carillion
  • Deloitte
  • EY
  • KPMG
  • Mitie
  • MORE

Overview
Catalyst
Summary
Accountancy’s wave of scandal
Carillion: auditors fail to question rising accruals despite public skepticism
Capita: frequent exceptional write-downs and dubious estimates
Mitie: £50m material ‘errors’ arise in listed infrastructure consultancy
The Big Four Oligopolists: global and specialist
2018 CMA review suggests a range of proposals
Public body appointment of auditors - an unwelcome interference
Joint or shared auditing - expensive for auditor and auditee
Market Cap thresholds - the Big Four preference
Breaking up is hard to do
16thc double-entry bookkeeping: not designed for intangibles
Conclusion
Appendix
Sources
Further Reading
Ask the analyst
About the Author

List of Figures
Figure 1: Capita auditors KPMG highlight Capita’s large intangible assets in its 2016 accounts
Figure 2: Proposals commentary: EY
Figure 3: Proposals commentary: PwC
Figure 4: Proposals commentary: Deloitte
Figure 5: Proposals commentary: KPMG

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  • Capita
  • Carillion
  • Deloitte
  • EY
  • KPMG
  • Mitie
  • PwC
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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