ACCOUNTING FIRM CONSOLIDATIONWord格式.docx

ACCOUNTING FIRM CONSOLIDATIONWord格式.docx

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ACCOUNTINGFIRMCONSOLIDATION

ViewsofSurveyedLargePublicCompaniesonAuditFees,Quality,Independence,andChoice

Mostofthe159respondentssaidthattheyweresatisfiedwiththecurrentauditor,andhalfhadusedtheircurrentauditorfor10yearsormore（seefigurebelow）.Generally,thelongerarespondenthadbeenwithanauditor,thehighertheoveralllevelofsatisfaction.Consistentwithhighlevelsofsatisfaction,GAOfoundthat,asidefromformerclientsofArthurAndersen,fewrespondentshadswitchedauditorsinthepastdecade.Whentheydid,theyswitchedbecauseofreputation,concernsaboutauditfees,andcorporatemergersormanagementchanges.Inlookingforanewauditor,themostcommonlycitedfactorstherespondentsgavewerequalityofservice,industryspecialization,and“chemistry”withtheauditteam.Finally,almostallrespondentsusedtheirauditorofrecordforavarietyofnonauditservices,includingtax-relatedservicesandassistancewithcompanydebtandequityofferings.

Respondentshaddifferingviewsaboutwhetherpastconsolidationhadsomeinfluenceonauditfees,butmostbelievedthatconsolidationhadlittleornoinfluenceonauditqualityorindependence.Respondentscommentedthatotherfactors—suchasnewregulationsderivingfromtheSarbanes–OxleyActandchangingauditingstandards—havehadagreaterimpactonauditprice,quality,andindependence.

Whilehalfoftherespondentssaidthatpastconsolidationhadlittleornoinfluenceoncompetitionandjustoverhalfsaidtheyhadasufficientnumberofauditorchoices,84percentalsoindicatedapreferenceformorefirmsfromwhichtochooseasmostwouldnotconsiderusinganon-Big4firm.Reasonsmostfrequentlycitedincluded

（1）theneedforauditorswithtechnicalskillsorindustry-specificknowledge,

（2）thereputationofthefirm,and（3）thecapacityofthefirm.Finally,someexpressedconcernsaboutfurtherconsolidationintheindustryandthelimitednumberofalternativesweretheytochangeauditorsunderexistingindependencerules.

Contents

Letter

ResultsinBrief1

Background2

MostRespondentsWereSatisfiedwithTheirAuditor,HadLong-term

Relationships,andUsedTheirAuditorforaVarietyofServices5

RespondentsHadDifferingViewsaboutPastConsolidation’sInfluenceonAuditFeesbutMostAgreedThatItHadLittleorNoInfluenceonAuditQualityorAuditorIndependence10

RespondentsWereConcernedThatLimitedAuditChoicesMayCreateProblems13

September30,2003

TheHonorableRichardC.ShelbyChairmanTheHonorablePaulS.SarbanesRankingMinorityMemberCommitteeonBanking,Housing,andUrbanAffairsUnitedStatesSenate

TheHonorableMichaelG.OxleyChairmanTheHonorableBarneyFrankRankingMinorityMemberCommitteeonFinancialServicesHouseofRepresentatives

Thenumberofpublicaccountingfirmswidelyconsideredcapableofprovidingauditservicestolargenationalandmultinationalpubliccompaniesdecreasedfromeight（the“Big8”）inthe1980stofour（the“Big4”）today.1Thesefourfirmscurrentlyauditover78percentofallU.S.publiccompaniesand99percentofpubliccompanyannualsales.TheBig4alsodominatethemarketforauditservicesinternationally.OnJuly30,2003,weissuedareportontheimpactofthisconsolidationoncompetitionandauditservicesprovidedtolargenationalandmultinationalcompanies（asmandatedbytheSarbanes-OxleyActof2002）.2ThissupplementalreportdetailsmorecomprehensivelytheresponseswereceivedthroughAugust11,2003,toasurveyofarandomsampleofFortune1000companiesontheirexperienceswiththeirauditorsofrecord.3Specifically,ourobjectivewastoobtaintheviewsofthechieffinancialofficersoflarge

1TheBig8wereArthurAndersenLLP,ArthurYoungLLP,Coopers&

LybrandLLP,DeloitteHaskins&

SellsLLP,Ernst&

WhinneyLLP,PeatMarwickMitchellLLP,PriceWaterhouseLLP,andToucheRossLLP.TheBig4accountingfirmsareDeloitteandToucheLLP,Ernst&

YoungLLP,KPMGLLP,andPricewaterhouseCoopersLLP.Thesefirmsdifferfromotherfirmsbytheirtotalrevenues,size,andglobalreach.

2SeeU.S.GeneralAccountingOffice,PublicAccountingFirms:

MandatedStudyonConsolidationandCompetition,GAO-03-864（Washington,D.C.:

July30,2003）andPub.L.No.107-204§

701（2002）.

3Wealsosurveyedthe97largestpublicaccountingfirmsfortheirviewsonaccountingfirmconsolidationanditspotentialimplications;

theirresponsesareincludedinourJuly30,2003,report.Thisreportfocusesontheviewsoflargepubliccompaniesasclientsofaccountingfirms.September30,2003

theirresponsesareincludedinourJuly30,2003,report.Thisreportfocusesontheviewsoflargepubliccompaniesasclientsofaccountingfirms.

nationalandmultinationalpubliccompanieson

（1）therelationshipoftheircompanywiththeirauditorofrecordintermsofsatisfaction,tenureoftherelationship,andservicesprovided;

（2）theeffectsofconsolidationonauditfees,quality,andauditorindependence;

and（3）thepotentialimplicationsofconsolidationforcompetitionandauditorchoice.

Wedrewarandomsampleof250ofthelargestpubliclyheldcompaniesfromthe2003listoftheFortune1000companiesproducedbyFortune,adivisionofTime,Inc.,afterremoving40privatecompaniesfromthislist.Ofthe250companiessurveyed,wereceivedresponsesfrom159companies,or64percent;

allofwhomusedaBig4firmastheirauditorofrecord.Theresponseratesforindividualquestionsvaried,dependingonhowmanyrespondentsansweredeachquestion.