The concentration of the global auditing business in the hands of the “big four” firms – KPMG, PwC, Ernst & Young and Deloitte – does not yet warrant government intervention, a report by the investigative arm of the US Congress said yesterday. The conclusion, by the Government Accountability Office, contrasts with a steady drumbeat of -warnings contained in recent high-level reports by private-sector groups, such as the US Chamber of Commerce.
Maybe Mr. Walker sees no reason why the Big 4 should be held responsible for their clients’ disastrous decisions leading to the sub prime and credit crises or their willingness to go along with clients’ lack of disclosure of those mistakes.
Maybe Mr. Walker is blind to the dramatic rise in all fees for audits and consulting due to Sarbanes-Oxley given the stranglehold the Big 4 have on providing services to the largest public firms under this mandatory requirement.
Maybe Mr. Walker doesn’t believe that lack of competition means the Big 4 can get away with encouraging, aiding, and abetting their clients’ use of the government as a “cash cow” or with cheating the government itself.
Maybe Mr. Walker is looking the other way as another Big 4 buys its way into shady deals via former government officials acting as lobbyists or performs services of the most extraordinary kind in unusual places.
Maybe Mr. Walker is dumb to the fact that it’s so bad, auditors won’t resign and aren’t fired, even when they’re sued by their own client’s shareholders.
Maybe Mr. Walker conveniently forgot that one of the firms had to be brought back from the abyss because the USDOJ believes there are too few for any one of them to fail.
Maybe Mr. Walker is oblivious to the huge settlements the firms have made due to their direct culpability in giant failures such as Tyco and Adelphia and their complicity in stock options backdating cases.
Given that Mr. Walker is both an Arthur Andersen and PwC alumnus, maybe he’s just like Mr. Olson – afraid of, or too close to, his former Big 4 colleagues to be able to be honest with us.