‘Big Four’ accountancy giants face probe in UK

Wednesday 28th November 2018 01:22 EST

The “Big Four” accountancy firms - Deloitte, EY, KPMG and PwC – are in spotlight following a strings of scandals in Britain. These firms, according to experts, have a long-established oligopoly to advise and monitor big business. The powerful companies engage in a wide range of activities, from accounts auditing and strategy consulting to proposed mergers and acquisitions, restructuring and taxation. However, a series of high profile corporate collapses in Britain - including retail giant BHS in 2016 and construction company Carillion in early 2018 - have put them into the crosshairs of the authorities.

The Competition and Markets Authority watchdog launched a sector review in October and is expected to report back before Christmas. Despite the controversy, firms feel they need one of the 'Big Four' on their side as investors usually want to see their labels when they scrutinize the quality of companies.

“Firms need to placate financial markets and having a ‘Big Four’ badge is one easy way to do this,” Professor Crawford Spence at King’s College London said. “These symbolic aspects are very important.” The Big Four audit all but one of the 100 companies listed on London’s benchmark FTSE 100 stocks index, media reports say. “This is partly explained by the need for big listed companies to have an auditor with an international network who can deal with subsidiaries overseas, partly with issues to do with brand,” added Spence.

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