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Dominance of Big 4 is a global problem, says FSA

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22nd Nov 2005
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The dominance of the 'big four' accounting firms poses a "potentially significant risk" to market confidence, and is also a problem for national regulators, who don't have the scope to regulate the whole firm, the Financial Securities Association (FSA)has warned.

The problem is global, says the FSA, in its International Regulatory Outlook published this week, since the Big 4 firms have global brands and structures built on networks of local partnerships subject to national laws and regulations. "Accordingly individual regulators do not have the scope to regulate the whole firm; but must focus on the local part. There is now a growing debate among national regulators relating to the oversight of ' and risks to markets arising from the market dominance of and resulting reliance on ' the 'big four' accounting and audit firms."

The DTI and Financial Reporting Council (FRC) recently commissioned a study of how concentration in the audit market affects provision and quality of services.

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