We’ve been debating the issue of audit competition for months, and the FRC
debate has generated few ideas.
Those serious about extending choice should be bold. The Pricewaterhouse and
Coopers & Lybrand merger is sometimes talked about by senior members of the
profession as not having been one of the more successful.
E&Y, for instance, is housed in one major building. PwC is based in
several. KPMG is moving to one building in Canary Wharf, and Deloitte is now
increasingly focused around Stonecutter Court.
But PwC is still somewhat fragmented wouldn’t that make it easier to divide
should push come to shove?
If the government were to reverse the merger, that would correct what some
see as an earlier error in allowing it. We have four firms because of the
reputational damage done to Andersen and because competition authorities waved
through the PwC merger not, as some insinuate, because of a lack of a
liability cap. You could say that splitting the firm would create difficulties
for PwC globally. But the network does run two firms out of Japan.
If the government genuinely thinks we need more audit choice, what’s stopping
Alex Hawkes is news editor of Accountancy Age
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