Most large U.S. companies won't even consider hiring an auditor from outside the ranks of the Big 4 accounting firms, but most said they'd prefer having more than four big firms, said a survey released on Tuesday.
Technical skills, reputation and audit capacity were reasons cited for sticking with the Big 4, said the survey by the General Accounting Office, investigative arm of Congress.
The poll of 158 big corporations found that 88 percent insisted on a Big 4 audit, while 86 percent said “they would prefer a market with more than four big firms.”
Consolidation in the accounting business has been a topic of some concern in corporate America since the Big 5 was trimmed to the Big 4 by the downfall of former accounting giant Andersen in the Enron Corp. scandal.
The surviving top firms — PricewaterhouseCoopers, KPMG, Ernst & Young and Deloitte & Touche — audit the books of 78 percent of U.S. companies.
There is a second tier of audit firms, such as Grant Thornton and BDO Seidman. They have picked up clients since Andersen's demise, but remain much smaller than the top firms.
Many of the corporations surveyed “also commented that they did not want to see further consolidation within the Big 4,” the GAO said. “However, almost two-thirds of all respondents said that they would not suggest any actions, such as government intervention, to increase competition.”
The GAO, under orders from Congress, surveyed large companies to determine whether having fewer accounting firms is affecting the market for financial audit services.