Overturning Morrison and authorizing extraterritorial private lawsuits likely would harm investors by increasing costs and creating a significantly greater risk of further concentration in the market for audit services, thus potentially leading to decreased competition in a market that is already relatively concentrated.
Since that time, however, the audit market environment has changed.
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The competition watchdog said "there are competition problems in the audit market", and added that it could ask the Competition Commission to conduct a detailed investigation, because the "statutory test" for a reference to the Commission had been passed.
"No one solution will achieve market correction, but rather a combination of tendering requirements, encouragement of transparency and dialogue between auditors, companies and investors, and reform of outdated exclusionary practices should provide a backdrop for a healthier FTSE 350 audit market, " said Simon Michaels, managing partner at BDO.
Since PwC has the largest share of the global audit services market perhaps they have more risk here than even Deloitte.
To begin an audit, sift through market reports that relate directly to your business.
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Free market economists admire the separation of money and government while audit-minded accountants relish its public traceability.
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The corporate governance rules that have been proposed by the New York Stock Exchange and the Nasdaq Stock Market both push for more independent directors on corporate boards and for audit committees composed entirely of outside directors.
The reform proposals posited by both the NYSE and the Nasdaq Stock Market could add to the workload as they call for extra work for audit committees.
Adding to this concern is that even as the number of mega audit firms has contracted from eight in the 1980s to four today, their combined market share remains formidable, especially in the United States.
The idea of a consolidated audit trail has been floating around for a while, but got added momentum after the May 6 stock market upheaval.
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