What the Collapse of the Large Firms Would Mean

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January 26, 2017

Comments

Mike

GT, RSM, BDO and PKI can step in.

Jim Peterson

Thanks Mike. Unfortunately -- can't happen. It's a matter of scale and risk tolerance. For 2016, KPMG -- by a good bit the smallest of the Big Four -- had global revenue of $ 25.4 billion. BDO - $ 7.6, RSM - $ 4.6, Grants - $ 4.6, PKI about $ 1. If magically (and impossibly) those four combined, they would still be dramatically smaller than the smallest. Neither alone nor together could any of them take on the audit of the large global public companies, if offered on a silver platter -- as their risk managers would confirm (if only off the record).

David Damant

The fact that there are four big accounting firms and not six is entirely the fault of the regulators. When Arthur Anderson fouled up with Enron there was no need to bust the whole world wide firm. And the merger of Price Waterhouse and Coopers should never have been allowed. David Damant

Jim Peterson

Thanks David. There are complexities the history of both Andersen's collapse and the merger that created PwC, that would expand your comment -- the challenge now being the fact that the surviving Big Four are down to "critical mass."

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  • © 2007-2016 James R Peterson Special thanks: Francine McKenna. Always with love: Kat and Julie. In memory: Bob White, Stuart Kadison