Auditing In Context

Auditing In Context



Summary

Big Four accounting network has required performing a quality services of auditing to multinational companies. There are sufficient choices have been available for them to create a sufficient competition among a large network that encourage higher qualities of audit, more efficient services with having a competitive prices to support clients.

Auditing service purchasers for Big Four need to recognize this and also appoint the auditors who believe that they will offer best quality services. In addition, with respond competitive pressure that largest audit service companies has made need to continue more and make significant investment in order to maintain and improve quality of audit service. In addition, these large firms would also allow smaller auditing firms in their network that make similar investment which are necessary to compete with the large market of audit. It will significantly create a gateway to provide a greater choice for the companies and increased competition.

Contents

Summary2

Introduction4

Background4

PwC4

Deloitte5

Ernst & Young5

KPMG5

Discussion6

Challenge6

Issues7

Competition and Audit Market8

Suggestions and Recommendations9

Conclusion10

References11

Auditing In Context

Introduction

The market for the financial audit is exhibits as a set of features that distinguish it from the other markets of business services. It seems to play a significant role in preserving transparency and improving the capital market functions. There has been concerned about the increasing concentration in the audit market globally since 1990, mergers of two big firm's results Big Eight firm convert into the Big Six (Crump, 2013). However, in 2010 Big 4 handled around 70% of the audit engagement and collect over 95% of the audit fees. This shows a clear picture that Big Four firms such as PricewaterhouseCoopers (PwC), KPMG, Deloitte and Ernst & Young (EY) completely dominate the audit market. These big four companies vet the accounts of majority Britain biggest companies but all top 100 listed companies audited by Big Four.

Background

2012 was become a banner year for all Big Four companies that are; KPMG, Ernst and Young , Deloitte & Touche and PricewaterhouseCoopers (PwC) has following a strong growth in year 2011. McLean et.al, (2003) indicates that these firms have a combined revenue reach up to $94 billion. These big four companies has cumulatively employee more than 700,000 staff all around the world with having over 38,000 partners overseeing. This employment has increase by the 50,000 from 2010 to 2012.

PwC

PricewaterhouseCoopers (PwC) is one of the biggest firms from the Big Four with having over 32 billion dollars revenue. It is become a titan by any standard of the business. Companies offer an employment over 190,000 peoples in more than 155 countries, from a global preference just few can match.

Deloitte

It is the alone group of America and become second in the list of Big Four in terms of its revenue. Company make staggering 30 billion dollars after expand their audit network over 150 counties all around the world. Delloitte have over 195,000 employees take make this firm largest in terms of the workforce among Big Four.

Ernst & Young

Audit firm from United Kingdom (London) it ...