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Law and Accounting Networks and Associations
provide these services. Regionally, many of the non-Big 4 have offices as large as the Big 4. They are seeking
their piece of the audit pie.358
The networks are therefore reaching out to governmental bodies to change the regulation to rotate auditors and
extend the rotation to these other networks. Their view is that this will increase quality and assure that there is
another independent review of the accounts of public companies. The European Group of International
Accounting Networks and Associations (EGIAN), a network of accounting networks and associations, has
recently filed a position paper with the EU outlining such a proposal.359 This position has been enunciated by
the chairman of the Public Company Accounting Oversight Board.360 Others have also voiced their concerns
of market dominance;361 whether these efforts will be successful has not been decided.362
Multidisciplinary and Specialty Networks
If a multidisciplinary network has members that are law firms, it would be subject to the issues of law firms
discussed above. If some of its members are accounting firms, it would not be subject to accounting rules
because the network would not be supplying the auditing services.
358 Rose Orlik, Audit Referral: Big 4 Resigned, Mid-Tier Rejoice, ACCOUNTANCY AGE (July 29, 2011),
www.accountancyage.com/aa/news/2098052/audit-referral-resigned-mid-tier-rejoice; see also Nick Huber, The Concentration Battle, INT’L ACCT.
BULL. (May 11, 2011), www.blog-audit.com/wp-content/uploads/2012/03/e%CC%81tude-InternationalAccountingBulletin1.pdf.
359 EGIAN, www.egian.eu/eo/veuredocpublic.php?idd=157.
359 Tammy Whitehouse, Doty Seeks Disclosure, Cooperation on Overseas Work, COMPLIANCE WEEK (July 01, 2011),
www.complianceweek.com/doty-seeks-disclosure-cooperation-on-overseas-work/article/206678/: “After shaking up U.S. markets with talk of new
audit reports and mandatory rotation, James Doty, chairman of the Public Company Accounting Oversight Board says the board will soon consider
another proposal that will require auditors to tell public companies how their audit work is parceled out to affiliate firms, sometimes overseas.”
359 Plans Grow for European Audit Cop, WALL ST. J. (Oct. 12, 2010); see also Karen Kroll, Get This: Accounting Firms Are Backing More
Regulation, CFO WORLD NEWSLETTER (Feb. 15, 2011).
359 Rose Orlick, Accounting Competition Fight is On for Global Networks, ACCOUNTANCY AGE (June 9, 2011),
http://www.accountancyage.com/aa/analysis/2077856/fight-global-networks: “Little in the way of competition regulation exists on a global scale. There
have been rumblings from the World Trade Organisation about establishing an oversight body, though so far the debate has not transcended the
conference hall. Mazars’ partner David Herbinet paints an even gloomier picture for second-tier firms: "It is interesting that, despite the ongoing
investigations by the EC and the Office of Fair Trading, the Big 4Big 4 firms continue to do as they please. If they were really worried, I would expect
them to stay under the radar.”
72
provide these services. Regionally, many of the non-Big 4 have offices as large as the Big 4. They are seeking
their piece of the audit pie.358
The networks are therefore reaching out to governmental bodies to change the regulation to rotate auditors and
extend the rotation to these other networks. Their view is that this will increase quality and assure that there is
another independent review of the accounts of public companies. The European Group of International
Accounting Networks and Associations (EGIAN), a network of accounting networks and associations, has
recently filed a position paper with the EU outlining such a proposal.359 This position has been enunciated by
the chairman of the Public Company Accounting Oversight Board.360 Others have also voiced their concerns
of market dominance;361 whether these efforts will be successful has not been decided.362
Multidisciplinary and Specialty Networks
If a multidisciplinary network has members that are law firms, it would be subject to the issues of law firms
discussed above. If some of its members are accounting firms, it would not be subject to accounting rules
because the network would not be supplying the auditing services.
358 Rose Orlik, Audit Referral: Big 4 Resigned, Mid-Tier Rejoice, ACCOUNTANCY AGE (July 29, 2011),
www.accountancyage.com/aa/news/2098052/audit-referral-resigned-mid-tier-rejoice; see also Nick Huber, The Concentration Battle, INT’L ACCT.
BULL. (May 11, 2011), www.blog-audit.com/wp-content/uploads/2012/03/e%CC%81tude-InternationalAccountingBulletin1.pdf.
359 EGIAN, www.egian.eu/eo/veuredocpublic.php?idd=157.
359 Tammy Whitehouse, Doty Seeks Disclosure, Cooperation on Overseas Work, COMPLIANCE WEEK (July 01, 2011),
www.complianceweek.com/doty-seeks-disclosure-cooperation-on-overseas-work/article/206678/: “After shaking up U.S. markets with talk of new
audit reports and mandatory rotation, James Doty, chairman of the Public Company Accounting Oversight Board says the board will soon consider
another proposal that will require auditors to tell public companies how their audit work is parceled out to affiliate firms, sometimes overseas.”
359 Plans Grow for European Audit Cop, WALL ST. J. (Oct. 12, 2010); see also Karen Kroll, Get This: Accounting Firms Are Backing More
Regulation, CFO WORLD NEWSLETTER (Feb. 15, 2011).
359 Rose Orlick, Accounting Competition Fight is On for Global Networks, ACCOUNTANCY AGE (June 9, 2011),
http://www.accountancyage.com/aa/analysis/2077856/fight-global-networks: “Little in the way of competition regulation exists on a global scale. There
have been rumblings from the World Trade Organisation about establishing an oversight body, though so far the debate has not transcended the
conference hall. Mazars’ partner David Herbinet paints an even gloomier picture for second-tier firms: "It is interesting that, despite the ongoing
investigations by the EC and the Office of Fair Trading, the Big 4Big 4 firms continue to do as they please. If they were really worried, I would expect
them to stay under the radar.”
72
