AUDITING - US Chamber of Commerce

Auditing: A Profession at RiskSUPPORT EXPANSION ANDCOMPETITION AMONGTOP-TIER FIRMSIn the end, competition is the best wayto ensure good customer service. Giventhe small number of top-tier firms, manypublic companies feel that they have alimited ability to negotiate with auditorsabout fees or terms of service. In fact, acommon concern among smaller publiccompanies is being dropped by their longstandingauditing firms. These companiesbelieve that they have practically nonegotiating power.Many companies also hire other membersof the Big Four for advisory and othernonaudit services that preclude thesefirms from bidding on audit work. Somelarge companies even have ongoingrelationships with all the Big Four.In order to offer companies more choicein choosing an auditor and to increasecompetition among the Big Four,we call upon the SEC to reexaminethe regulations that prohibit the BigFour firms from competing for auditassignments when they have performeddisqualifying services in prior years. Amodification in this policy that allows forgreater flexibility and greater competitionamong the Big Four would enhance marketforces in the profession and ultimatelybenefit our capital markets.16