In a move which mirrors work currently underway here in the UK, the
US Treasury has announced a review of the
US audit market.
The move is tacit acknowledgement that the US government no longer sees the
current market of just four global audit firms as sustainable.
In an article in the Financial Times today, US Treasury secretary
Henry Paulson writes
that the collapse of Andersen as a result of the Enron crisis has raised
‘legitimate questions about the sustainability of the auditing profession’s
He has asked the former Securities & Exchange Commission chairman Arthur
Levitt, and Donald Nicolaisen, former SEC chief accountant, to co-chair a
committee to addess ‘auditing industry concentration’.
It was only at the beginning of this month that Christopher Cox, the current
chairman of the SEC, visited London and pointly supported the work of the FRC on
improving audit choice in the UK.
‘The SEC is very impressed with the market participants group interim report,
particularly its focus on contingency planning in the event of a large firm
leaving the market,’ Cox said, while sharing a platform with the FRC’s Paul
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