What it wasn’t expecting was the level and ferocity of that resistance from dissenting voices within the investor community.
It is not entirely clear where the persuasion process went off the rails, but instead of providing a consensus in favour of a cap, the Big Four could end up facing an inquiry from the Competition Commission.
Some investors have argued, in their submissions to the department of trade during its consultation on a cap, that the Big Four operates a ‘complex monopoly’.
The likes of Morley Fund Management and the National Association of Pension Funds, two of the biggest names in UK investment, have specifically called for the government to look into the operations of the country’s biggest accountancy firms.
Several other investment bodies have voiced grave concerns over the general competitiveness of the profession.
How much of this is down to genuine worry about the lack of competition in the industry, and how much is a backlash to a perceived move by accountants to get more protection than they deserve, is open to question.
But some valid points are being made. All of the FTSE100 companies are audited by the Big Four as well as 96% of the FTSE 250. The next largest firms are nowhere near the same size and are in no position to compete.
But then again, this is hardly the fault of the Big Four. These firms did not drive Andersen out of business, and they have argued that the liability cap is just another method of ensuring competition is not eroded further. This issue has been looked at several times before, and in all circumstances, there was no action needed.
It seems odd that such a bitter row has erupted when both sides actually want the same thing. The sooner there is a full and frank discussion about the possibility of a proportionate liability system, the sooner frayed relationships between investors and auditors can start to heal.
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process