The Big Four of accountancy, which comprise Deloitte and Touche, Ernst and Young, KPMG and PwC, have become too big to fail according to a prominent Harvard Business school academician. This, in turn, has forced small audit firms to give up on weathering the sector and yield to mergers with the Big Four firm of their choice. That is, if they get seen by these giant firms. The thing is, are minor audit firm Singapore bound to suffer fiscal risks following their merger with a Big Four?
Experts hypothesize that in some way, the relationship of surviving accounting firms and regulators would be affected and so do accounting rules and capital markets. Major auditors, of course, would become more secure in their position when it comes to their relationships with finance regulators. This means they could be more lax in their duties and wouldn't be that worried about the repercussions of their judgements.
On the other hand they could become risk averse since their decreasing numbers can make them easy targets. They may also tend to focus more on their client's needs since they would feel less pressure to compete with other industry players. This could be what Singapore accounting firms have been doing already, since the industry has managed to position itself as Asia's foremost accountancy hub. By refocusing its resources and diversifying it services, e.g. offering secretarial services Singapore, it has managed to stay afloat as well despite ongoing economic crisis.
The oligopoly tightening, as recent studies reflect, is based on the bigger concerns of audit firms that their reliability may be compromised and their whole operations litigated. This fact is believed to be caused by a change in arrangement of monitors, macroeconomic trend changes, the rise of fair-value-based accounting and total stock market activities.
Unless more research is created on this issue, specialists and economists could only speculate of what's going on with the sector in the context of globalization, information technology and finance.
Experts hypothesize that in some way, the relationship of surviving accounting firms and regulators would be affected and so do accounting rules and capital markets. Major auditors, of course, would become more secure in their position when it comes to their relationships with finance regulators. This means they could be more lax in their duties and wouldn't be that worried about the repercussions of their judgements.
On the other hand they could become risk averse since their decreasing numbers can make them easy targets. They may also tend to focus more on their client's needs since they would feel less pressure to compete with other industry players. This could be what Singapore accounting firms have been doing already, since the industry has managed to position itself as Asia's foremost accountancy hub. By refocusing its resources and diversifying it services, e.g. offering secretarial services Singapore, it has managed to stay afloat as well despite ongoing economic crisis.
The oligopoly tightening, as recent studies reflect, is based on the bigger concerns of audit firms that their reliability may be compromised and their whole operations litigated. This fact is believed to be caused by a change in arrangement of monitors, macroeconomic trend changes, the rise of fair-value-based accounting and total stock market activities.
Unless more research is created on this issue, specialists and economists could only speculate of what's going on with the sector in the context of globalization, information technology and finance.
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