Introduction
Nowadays, the global accountancy is dominated by the Big Four. Those four are Deloitte, Ernst & Young, KPMG and Pricewaterhouse Coopers (PWC). They have audited all the top 100 public companies as well as the majority of the top 350 companies (119). Thus, those four auditors dominate their market across the world. Their dominance of the market raises concerns about competition and choice in the provision of a service their clients have no choice but to buy. The domination of the auditing market by the Big Four auditing firms have include it advantage and disadvantage.
Advantages
The Big Four are international in scope and employ a large number of people. They have provided more training to their staff. Auditors working in a large office have greater exposure to different clients, and therefore have more collective experience which enables them to provide higher quality audits. This will able the auditors have more opportunity to interact with different clients. Therefore, the Big Four can help the audit market to train professionals’ auditors (8). For example, the experiences auditor can work very well and can spotlight the grey area faster. This is because an auditor is forming an independent opinion whether the financial statements give a true and fair view. Such a task needs to be performed by professional audit personnel.
Moreover, the domination of the Big Four firms can standardize the business process in order to help to improve personnel efficiency and performance and protect the confidentiality in the field of auditing. Confidentiality is a significant issue in auditing for a professional auditor. Thus, as a professional auditor should secrecy the information of the business and should not be disclose a...
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...se they have little competition the product will not evolve (a).
Conclusion
As conclude, Big Four are plays a significant role in the auditing market, there have contribute the both positive and negative influence on the auditing market. The Big Four have played a positive role in the professional development and they have audited all the top 100 public companies around. However, in the past few years, there has a numerous audit failure cases happen and cause the fluctuation in the economic. Therefore, I believe that the domination of the Big Four audit firm will cause a lot of disadvantages to the audit market. As the Big Four audit dominance not best for investors and it also hurts the competition for public company audit work and result in higher prices, lower quantity and less innovation and differentiation than would be the case in a more open market.
Auditors do not provide audit opinions for different levels of assurance. Therefore, auditors consider providing more or less assurance when modifying evidence for engagement risk to be unnecessary. However, auditors should be professionally responsible to accumulate additional evidence, assign more experienced personnel, and review the audit more thoroughly, particularly when a client poses a higher than normal degree of engagement risk. The auditor should also modify evidence for engagement risk when high legal exposure and other potential actions affecting the auditor
With every business activity come opportunities for fraudulent behavior which leads to a greater demand for auditors with unscathed ethics. Nowadays, auditors are faced with a multitude of ethical issues, and it is even more problematic when the auditors fail to adhere to the standards of professional conducts as prescribed by the American Institute of Certified Public Accountants (AICPA). The objective of this paper is to analyze the auditors’ compliance with the code of professional conduct in the way it relates to the effectiveness of their audits.
If you do want to work for an accounting firm they would be public and private firms. A public firm does auditing, taxing, advisory, and consulting services. Examples of public firms would be The Big Four (Deloitte, PwC, Ernst & Young, and KPMG). A
In favor of students who are interested in accounting and auditing areas, we provide here key elements of PwC – one of the largest companies in this industry, and recommend ways to secure a position in PwC to interested students.
Introduction Within the current crisis of confidence in the public accounting profession after the Enron debacle and series of high profile failures of financial services firms, the issue of ‘audit expectation gap’ has never been more important. Though it would take an enormous amount of effort to address these issues, I will argue that tremendous amounts could be done in order to close the gap. In this essay, I will discuss some of these issues and in particular the strategies to reduce the gap. Definitions Various definitions have been proposed for the audit expectation gap.
Management accountants use their skills to help with decisions that help a business make good decisions so they company will be valuable and in an ethical manner. They assess risk and implement strategy through planning, budgeting, and forecasting. Now managerial accounts have become critical with their analysis while managing a business. They do more than provide financial information they also have an active role in the business. Over the years managerial accountants has changed and now provide nonfinancial information. They can help a business achieve their goals. Today there is many things that is influencing how managerial accountants do their job with the emergence of e-business. They can use their knowledge to streamline the e-business (Hilton,2008). Now global competition has new challenges for managerial accounts because trade agreements can affect the way the business performs abroad. Gillet (n.d) said, “To be competitive, manufacturers must keep up
The implementation of big data into the audit profession will be welcomed considering the current business environment. While there are some drawbacks, big data has a role in audits. The main questions that will face the new wave of auditors will be in which ways and how big data can be used in the audit program. It’s clear that auditing standards, clients, firms, and higher education will all have to address these issues in the near future as audit adapts to the potential of big
In order to ensure an organization’s financial order, auditors with international standards are a vital part. However, very few auditing companies exist in Afghanistan that can provide auditing services in compliance with international accounting standards. Fortunately, ACC is one of those few auditing firms that can confidently say that its auditing services are in the highe...
Corporate governance changed drastically after the case of Andersen Auditors, Enron’s auditing service showed that they contributed to the scandal. Andersen was originally founded in 1913, and by taking tough stands against clients, quickly gained a national reputation as a reliable keeper of the people’s trust (Beasley, 2003). Andersen provided auditing statements with a ‘clean’ approval stamp from 1997 to 2001, but was found guilty of obstructing justice by shredding evidence relating to the Enron scandal on the 15th June 2002. It agrees to cease auditing public companies by 31 August (BBC News, 2002).
Conflict of interest is a big problem between Enron and its auditing firms. It is believes that Enron’s auditors was hide many information and external auditors never aware or hide the losses in Enron. From audit committees to transparency committees would increase the likelihood that a firm’s key business ricks are transparent to investors (Healy & Palepu 2003, p. 21). Besides, a transparency committee can also help with internal auditor appreciate its primary responsibility lies with the board, not for personal interest and pleasing the leader.
The complete destruction of companies including Arthur Andersen, HealthSouth, and Enron, revealed a significant weakness in the United States audit system. The significant weakness is the failure to deliver true independence between the auditors and their clients. In each of these companies there was deviation from professional rules of conduct resulting from the pressures of clients placed upon their auditors (Goldman, and Barlev 857-859). Over the years, client and auditor relationships were intertwined tightly putting aside the unbiased function of auditors. Auditor careers depended on the success of their client (Kaplan 363-383). Auditors found themselves in situations that put their profession in a questionable time driving them to compromise their ethics, professionalism, objectivity, and their independence from the company. A vital trust relationship role for independent auditors has been woven in society and this role is essential for the effective functioning of the financial economic system (Guiral, Rogers, Ruiz, and Gonzalo 155-166). However, the financial world has lost confidence in the trustworthiness of auditor firms. There are three potential threats to auditor independence: executives hiring and firing auditors, auditors taking positions the client instead of the unbiased place, and auditors providing non audit services to clients (Moore, Tetlock, Tanlu, and Bazerman 10-29).
The major characters of the tradition audit are all information what is needed by auditors are on the paper and the manual calculators and without high communication technology. Auditors usually were limited by the place in the paper time. When a several people are working on the same auditing project for a client with offices in cities across the country, even worldwide, it takes a lots all time those auditors get the information which they need from the client, even there is risk paper information disappear for many reasons. on the another hand, mail paper information increase the auditing cost. The mistake caused by the manual calculators inevitably, no matter how fixed auditors concentrate on recalculate is, after all auditors are human. The global business become major in the modern business world, some example, several auditors who are in different locations are working a same auditing project, or auditors are in different city even country with the client, when there is issue among these auditors or between auditors and client, they only can communicate with each other by phone or be together and have meeting. Phone call can not make sure information been watched in the same time when the voice is talking about the issue, but having a meeting takes time and money make all people together, it increases auditing cost.
Increased competitions and high expectations of the companies have put high pressure on the accountants. Making the most accurate decisions and helping the companies maximize their financial performances have become almost basics of the accountants’ duties. Many business owners question why they need to seek the services of an accountant when they can do many things themselves with the help of the technological tools. Today, an accountant must provide more than what technology can do for the company. They have to set business plans, goals and provide guide to achieve them with less cost and most profit. They have to advise business on their investments and project the most profitable decisions for the company. Beside the investments, accountants expected to consult the firms on their consolidations with other firms. Making decisions and researches on reducing costs, and sharing resource while providing variety of offerings puts lots of stress on the
Audit Risk is the risk that an auditor has stated an incorrect audit opinion on the financial statements. It may cause the auditors fail to alter the opinion when the financial statements contain material misstatement. The auditor should perform the audit to lower the audit risk to a sufficiently low level. In the auditor’s professional judgement, the auditor should appropriately state a correct opinion on the financial statement
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.