Challenges Confronting Issuers & Auditors
Mission
The effective performance of independent audits of public companies is critical to achieving confidence in and maintaining consistency among public company financial statements and, thus, public accounting firms play a central role in maintaining confidence in our capital markets.
Historically, the vast majority of public company audits have been concentrated in a relatively small number of audit firms and over the past two decades the number of “Big” audit firms has decreased from eight to four. As a result of this consolidation, the “Big Four” audit a significant portion of U.S. public companies.
With the legal challenges facing many of these firms, including the demise of Arthur Andersen in 2002, this Working Group is considering the widespread concern over the significant challenges the current environment present the “Big Four” and that the demise of one of these firms could have wide-ranging, negative public policy implications on the U.S. capital markets. This concern is heightened by the fact that these firms are by-and-large uninsured. At the same time, this Working Group recognizes the increasing concern about potential conflicts of interest of the Big Four and their ability to uncover financial irregularities in a timely manner and at a reasonable cost.
Working Group Members
Articles:
Regarding Cost of 404
Regarding DOJ policy on indicting business organizations.
Regarding challenges facing the Big 4
SEC position on charging firms vs. individuals
