Transparency would help to address the audit market problem

Abstract

Nicolas Véron responds to a consultation by the UK Financial Reporting Council and makes recommendations on how to address the Â?audit market problemâ?? resulting from the presence of only four international audit networks. Eventhough serious problems would be created by the disappearance of one of these Â?Big Fourâ??, policymakers should not try to protect them at any cost. Before envisaging measures on audit firm liability or change in ownership rules, more evidence should be gathered on key issues of the debate, and firms should provide more transparency about their financials and governance arrangements.