Cover Image
Market Research Report

A New Audit Era: Big Four Must Account for Themselves in CMA Shakeup

Published by MarketLine Product code 806193
Published Content info 14 Pages
Delivery time: 1-2 business days
Price
Back to Top
A New Audit Era: Big Four Must Account for Themselves in CMA Shakeup
Published: March 11, 2019 Content info: 14 Pages
Description

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?
Table of Contents
Product Code: ML00030-016

Table of Contents

  • 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 MarketLine
    • Disclaimer

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
Back to Top