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SOX is such a well thought of law. It requires any public company listed in thr US to have one auditing company and one "consulting" company supporting the set
by hef19898 4y ago
SOX is such a well thought of law. It requires any public company listed in thr US to have one auditing company and one "consulting" company supporting the set up internal controls and processes, prepare the books and so on. Those comoanies have to br changed every couple of years (if memory serves well every four years), and you cannot simply switch roles and stay with the same two. Hence a market demand for the big four: A prepares the books, B audits them. Then C replaces A and D replaces B.
Read up on regulations, it helps!
- Aperocky 4y ago> SOX is such a well thought of law. Is it? The incentives are not going to be aligned so far as the auditing companies are hired by the company being audited. It doesn't matter how many auditing company there is and the division of labor within. Think of lobbyists, there are many different flavor of lobbyists, some might even be against the others. They distribute events, campaign finances and other things to legislators and as we know recently even certain members of judiciary. A bad idea in general in terms of the incentives at play.