There are at least four large accounting networks around the world competing to provide audit services to the largest, most complex organisations. Does this allow for enough competition though? To encourage smaller firms to acquire the expertise and breadth needed to compete with the bigger firms, certain market interventions have been proposed, such as mandatory firm rotation and so-called ‘audit-only’ restrictions on the largest audit networks and joint audits.
Because quality audits of public companies provide investors and other stakeholders with confidence in a company's reported financial information, we believe competition is key to making sure the public interest is continuously well-served.
PwC supports measures that encourage natural competition. However, we believe artificial market interventions like mandatory firm rotation may lead to significant adverse consequences - lower quality, less innovation and reduced efficiency.