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February 13, 2017


Tom Rudibaugh

One query: Are you certain that tax would stay with audit v. pushing to be added to advisory services practice and also pull away from audit?

Jim Peterson

Thanks Tom -- Where a tax practice might go in a Big Four break-up would be hard to predict, not least because the dynamics are in tension. The tolerable association of tax compliance with audit is so long-standing, even though inconsistent with both the theory and the pressure for audit-only, that it might prevail. On the other hand, regulatory attitudes in the EU, for example, are pressing in favor of purer "audit-only."
Meanwhile, as I have written here and as treated in my book, my own view is that the entire body of scope-of-service restrictions is obsolete and anachronistic, and that independence constraints should simply be abolished -- an unconventional position, I know, but one that structural changes in the Big Audit model will sooner or later put to the test.

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