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Consolidation and Competition in Public Accounting

By Robert Bloom and David C. Schirm

JUNE 2005 - The Sarbanes-Oxley Act of 2002 (SOA) charged the General Accounting Office (GAO, which changed its name to the Government Accountability Office in 2004) with examining the factors underlying audit mergers in the 1980s and 1990s, and the effects of such consolidation on competition, cost, quality, and independence in auditing, as well as on capital formation and the obstacles facing smaller audit firms in attempting to compete with the Big Four (Ernst & Young, Deloitte & Touche, KPMG, and PricewaterhouseCoopers). The GAO released its report, “Public Accounting Firms: Mandated Study on Consolidation and Competition,”July 2003, on the first anniversary of the SOA.

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June 2005 Issue

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Features

Consolidation & Competition in Public Accounting

Tax Law Changes Incentivize the Industry

Toward Improved Internal Controls

Expanded Audit Documentation

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Essentials

Publisher's Column

Perspectives

International Shipping Industry Benefits from Recent Tax Changes

Despite its continuing importance, the shipping industry has lost most of the prestige it held in this country. One reason is that although several U.S. shipping companies are publicly traded, the nation is less well represented in international shipping than in other, comparable global industries. Full Story

Fixing the Income Tax: Transparency and Simplicity

The federal income tax has always been an area of public policy where the CPA profession can make a valuable contribution. Last year, during his term as NYSSCPA president, John Kearney appointed David A. Lifson to head a Committee on Practical Reform of the Tax System to discuss federal tax policy from a “big picture” perspective and to make recommendations to radically change the tax code. Full Story

Reflections on the NYSE and the ‘Grasso Affair’

Even though the recent events at the New York Stock Exchange (NYSE) surrounding the departure of Chairman Richard Grasso raised the possibility of important reforms, the current and proposed structural changes within the exchange will be insufficient to reform the institution’s governance. Notable financial disasters like Enron and WorldCom point to systemic problems in U.S. financial markets. Full Story

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