For those of you who are entering into your first busy season next year, or just finished busy season, take a vacation. I need one right now to recharge my batteries, can hopefully take one soon. At least we have the spring going for us.
Here's a little article of interest ...can we say oligopoly...
British Business Monitor
30 April 2008
(ADP) - Apr 30, 2008 - The four big audit firms' domination has caused an average rise of 2.4% in their fees not taking into account other factors like regulation changes, London School of Economics' study shows, the Financial Times reported.
PwC, Deloitte, KPMG and Ernst & Young audit all companies listed on the FTSE 100 index and almost all on the FTSE 350 after the collapse of Arthur Andersen in 2002.
Although the fees' rise might seem insignificant, the fact that the rise could have resulted from a market dominance reinforces the debate about the risks of just four firms auditing the accounts of all largest businesses.
The Big Four's competitor BDO Stoy Hayward, which financed the research, said that the audit market has entry barriers.
According to the study, between 1998 and 2006 the premium in the fees of the Big Four was 13% on the average and went up to 20% after 2002 when Andersen crashed. So far the rise in fees was said to result from new regulations. However, the study states that the smaller number of auditors has had an effect.
UK watchdogs have recognised the risks coming from the Big Four’s market dominance, but being so far concerned not with the audit fees but rather with a possible collapse of another big auditor.
Here's a little article of interest ...can we say oligopoly...
British Business Monitor
30 April 2008
(ADP) - Apr 30, 2008 - The four big audit firms' domination has caused an average rise of 2.4% in their fees not taking into account other factors like regulation changes, London School of Economics' study shows, the Financial Times reported.
PwC, Deloitte, KPMG and Ernst & Young audit all companies listed on the FTSE 100 index and almost all on the FTSE 350 after the collapse of Arthur Andersen in 2002.
Although the fees' rise might seem insignificant, the fact that the rise could have resulted from a market dominance reinforces the debate about the risks of just four firms auditing the accounts of all largest businesses.
The Big Four's competitor BDO Stoy Hayward, which financed the research, said that the audit market has entry barriers.
According to the study, between 1998 and 2006 the premium in the fees of the Big Four was 13% on the average and went up to 20% after 2002 when Andersen crashed. So far the rise in fees was said to result from new regulations. However, the study states that the smaller number of auditors has had an effect.
UK watchdogs have recognised the risks coming from the Big Four’s market dominance, but being so far concerned not with the audit fees but rather with a possible collapse of another big auditor.
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