Reuters informs us that the Big 4 firms will likely continue their dominance of the audit market and thus perpetuate their very own version of the "vampire squid wrapped around the face of humanity"From the sounds of the piece, at least it appears that the EU sees the problem that four firms dominating the market won't cut it:
The current financial crisis makes it vital that we have a truly sustainable audit market, and the consultation results published today provide valuable insight into problematic issues," EU Internal Market Commissioner Charlie McCreevy said in a statement.
So we'll interpret the phrase "truly sustainable audit market" as "four firms is not enough" because the "current financial crisis" could very well claim a victim that has KwaterhouseDeloitteYoung in the name. The Big 4 is cool with a little more competition but, not surprisingly, their solution is "let us do what we want do and if we mess up, things will still be cool":
"The existence of a liability cap which is proportionate to audit fees would remove one of the potential barriers to mid-tier companies wanting to penetrate the large-tier market," said Jeremy Jennings, chairman of the European Contact Group, which represents the world's six biggest auditors.
Proportionate to audit fees? Is this guy kidding? So even if a firm were botch the audit for every single audit client, they'd still be in business? The investment value lost in cases like Enron, WorldCom, et al. dwarfed the audit fees paid by those companies.
Liability caps will do very little except reduce their professional accountability and thus, make the large firms more bullet-proof and strengthen the stranglehold further. Same song and dance from the Big 4.
SIGH. There seems to be little hope for this particular oligopoly to foster any new competition until it's far too late. And with the piling litigation, often due to auditor complacency, that day of reckoning may be coming very soon.
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