I’m sure that a fair few of you have seen it yourself, and there are some true lines of genius in there. Personally, my favourite is: ‘The atmosphere is so tense, if Elvis walked in with a portion of chips, you could hear the vinegar sizzle on them.’
But another one jumped out at me as having an, admittedly tenuous, link to the current state of play with the Big Four in the audit market.
‘When Alexander of Macedonia was 33, he cried salt tears because there were no more worlds to conquer. Eric Bristow is only 27.’
This month’s release of the company law reform white paper could not only ensure the continued existence of the Big Four, but also permanently cement their position as the dominant force in accountancy.
Having won their long-running battle for proportionate liability, there could indeed be no more worlds to conquer. But I doubt there will be any salt tears.
Now don’t get me wrong, the introduction of proportionate liability is a just move by the government that should protect firms from totally outrageous claims by companies, and it will not stop a firm from going under if they make an almighty mess of an audit.
Steps have also been taken to improve audit quality, but the issue of addressing competitiveness, and breaking the stranglehold of the Big Four, is still very tentative.
The ICAEW’s Audit Quality Forum has the subject on its agenda, but what will be decided and how much change will be recommended is unclear.
As the ultimate issue is about improving the quality of the audit, the forum could conclude that the current state of play, with a dominant Big Four, is the optimum to address client needs.
Maybe this is the case, although I’m sure many mid-tier firms would vigorously disagree. During this crucial debate on competition we have to ensure that we aren’t, in the immortal words of Waddell, allowing something akin to ‘giving Dracula the keys to the blood bank’.
Paul Grant edits the audit page.
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