“The Future of the Accounting Profession: Auditor Concentration” addressed the issues of competition among audit firms and emerging threats to the auditing profession.  The May 23, 2005 project was co-chaired by Rod Hills, partner, Hills & Stern, and former chairman of the SEC, and Mike Cook, former chair and CEO, Deloitte & Touche USA LLP. 

Participants expressed concern with the degree of concentration in the auditing marketplace. Participants did not support government intervention to facilitate creation of another large firm, but the report says: “Increased concentration, brought on by the collapse of one of the four large firms, however, would be disastrous for the remaining firms, public companies, the financial markets, shareholders, and investors.” 

There was significant concern that a growing litigation threat could imperil one or more of the large firms. The report observes that: “Participants widely agreed that the threat of liability and the consequences of losing another Big 4 firm are more serious than most people realize, and far more serious than just a few years ago.”

Participants believe that financial leaders should work with the audit profession, regulators, and government officials to identify ways to meet these challenges and preserve private audits of public companies.