A new audit era: Big Four must account for themselves in CMA shakeup
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.
- 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.
- 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?
Table of Contents
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
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
A selection of companies mentioned in this report includes: