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Welcome to the world of audit. There are only 4 firms left after decades of consolidation and an Enron scandal. They are the only people they actually check the

Welcome to the world of audit. There are only 4 firms left after decades of consolidation and an Enron scandal. They are the only people they actually check the books of firms, and they all have profitable consultancy services that totally don't create conflicts of interest. https://en.wikipedia.org/wiki/Big_Four_accounting_firms https://en.wikipedia.org/wiki/Big_Four_accounting_firms

dmurray 6y ago
Well, no. There are thousands of small accountancy firms that will audit your small business' accounts. For large companies, you may as well go with one of the big 4 partly because of economies of scale - you want your auditor to have experience with similar companies, and almost by definition a smaller audit firm won't have lots of large clients.
- tialaramex 6y ago
  Nothing that they said is wrong. The Big Four are a huge problem, and it's particularly interesting that the US hasn't done anything about it. Maybe not under its current (extremely corrupt) administration, but some of the previous ones seemed like they were at least sometimes shooting straight. This would for example, definitely be the kind of thing I'd expect an alternate universe President Warren to "have a plan" for. London has an obvious excuse, three of the four are legally based there (the Big Four are all organised as groups of franchised firms, to reduce overall legal exposure, but they each have a group HQ and three of those HQs are in London). Even if you are quite sure they're committing billions of dollars of fraud (which I can't prove but you'd think a government might have the resources) some of those billions go into the UK economy via these HQs, so driving them away seems like a bad idea. The US doesn't even have that incentive, any replacement audit system would also spend a lot of money in New York and Washington as the current one does, but it could hardly be any more corrupt, so why not intervene?

dmurray 6y ago

Well, no. There are thousands of small accountancy firms that will audit your small business' accounts. For large companies, you may as well go with one of the big 4 partly because of economies of scale - you want your auditor to have experience with similar companies, and almost by definition a smaller audit firm won't have lots of large clients.

tialaramex 6y ago
Nothing that they said is wrong. The Big Four are a huge problem, and it's particularly interesting that the US hasn't done anything about it. Maybe not under its current (extremely corrupt) administration, but some of the previous ones seemed like they were at least sometimes shooting straight. This would for example, definitely be the kind of thing I'd expect an alternate universe President Warren to "have a plan" for. London has an obvious excuse, three of the four are legally based there (the Big Four are all organised as groups of franchised firms, to reduce overall legal exposure, but they each have a group HQ and three of those HQs are in London). Even if you are quite sure they're committing billions of dollars of fraud (which I can't prove but you'd think a government might have the resources) some of those billions go into the UK economy via these HQs, so driving them away seems like a bad idea. The US doesn't even have that incentive, any replacement audit system would also spend a lot of money in New York and Washington as the current one does, but it could hardly be any more corrupt, so why not intervene?