The analysis of employment within the Big4 done from a survey of auditing and taxation staffs involved seems to indicate the following results. Those that are already in the BIG 4 can try to provide some additional feedback to improve this information so as to enable the others to make a more informed decision about which firm to join. In the market there is only the BIG 4 and not as claimed by some as the BIG 5......that would be false advertising / misleading. The measurement of BIG is related to gross fee income, which is very clear within the audit market. Anyone claiming that they are the BIG 5 have to be accepted by the audit industry as the 5th player.
Recent findings in Australia has cast significant doubt about the quality of audit scepticism within the industry with 17% of the audit reports being faulty (Imagine the levels within Malaysia) Recent conversations with some finance directors and managers seems to indicate that audit managers and partner are accommodating their clients since they are concerned abut the fee that would be earned. There are incidents where firms resign rather than give a qualified audit report (fear of damaging their reputation)
The incidents reported by the SUN paper on 7th of July 2011 indicates that there is significant audit failures within the China, resulting in many of the US and Canadian listed companies being de-listed and failing. This has already cast significant doubt about the quality control practiced by the "overseas firms", damaging the reputation of auditor further.
Given the current economic climate, with significant uncertainties within the global financial markets, 3F would be re-appearing faster now - Financial fraud, Financial instruments manipulation and Fair value manipulation. Auditors should be bold to question and be sceptical of the financial instruments and fair values used by management - question the assumptions and the basis on which values are derived.
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