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

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.


– 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?

Table of Contents

Table of Contents




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




Further Reading

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List of Figures

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


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