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

Published: March 2019
Pages: 14
Code: A2571BCE633518F834AB4B2F36589A67
Format: PDF
Publisher MarketLine
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$ 995.00
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.

Additonal Information

  • - 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?
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  • 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