30th July 2010:

“The audit market has an issue…

… - the Big Four dominates large and public company audit and there's little sign of anyone finding a way into this market from outside the Big Four.  But the issue here is banking covenants/credit agreements which restrict many companies to using only a Big Four auditor.  Not until we know the true extent of this practice will we know what really underpins Big Four domination.  The regulators have anecdotal evidence that the restrictive covenants are used, but have little or no information about the scope of their use.  The regulators should, therefore, be working out how they get their hands on that information.  In the US public companies disclose their credit agreements to the regulator - time the same thing happened here.”

 Global Accounting  Standards & Regulators  4 Comments July 30th, 2010