Big4Firms.com

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An article by The CPA Journal cites that, “These firms [the Big 4 Firms] dominate the market for auditing services: the Big Four audit more than 78% of all U.S. public companies, representing 99% of public company sales.”  It is a reasonable conclusion to reach that such market domination by the Big4Firms creases a near monopoly environment whereby the Big 4 Firms that dominate the market for public company audits can charge absorbent audit fees due to a lack of competition.

 

The United States government has exercised its ability to regulate and break up monopolies that are against public interest.  Monopolies allow for unreasonable market competition and domination, which leads to unfair prices being charged to the public as a result of a lack of options available.  While there are many quality public accounting firms outside the Big4Firms, their ability to compete with the Big4Firms is limited by the monopoly that the Big4Firms has on audits of public companies.

 

Under the Quality section of this website, the Big 4 Firms do have impressive resources to handle the most complex situations.  However, the argument can be made that firms other than the Big4Firms can deliver the same audit quality, especially in the information age that we live in. 

 

It is a simple economic concept that the more competitive players that are in the same market will result in more competitive pricing and a renewed commitment to quality and differentiation. 

The Big 4 Firms:  Market Domination