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Topic: Big Five auditors

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	Francis1
		In contrast to a firm-wide analysis of Big Five firms where no single client is a significant source of revenue, at the office level a single client has the potential to be very important.
		Previous research indicates that Big Five firms have a reputation advantage over non-Big Five firms, and that the incentives of firms choosing non-Big Five auditors may be different from those of firms audited by the Big Five (Craswell et al., 1995; Francis and Wilson, 1988).
		For each observation in the study, the local office of the Big Five accounting firm with primary engagement responsibility is identified from the office letterhead on which the audit report is written.
	www.sec.gov /rules/proposed/s71300/francis1.htm (9294 words)

	The Changing Role of IS Audit Among the Big Five US-Based Accounting Firms
		Financial auditors had little understanding of the work done by the IS auditors and were not confident enough of the IS audit risk assessment to factor it into their audit planning.
		One auditor expressed a preference for hiring on-campus because, "It was better to hire a new dual-degree recruit and solve the problems 3-4 years down the road." Another problem was that the auditors perceived the career path on the IS audit side to be more limited than on the financial audit side of the firm.
		We asked each of the auditors to estimate the number of IS audit personnel and the size of the practice in revenues ten years ago and five years from now.
	www.isaca.org /@member/journal/jrnlv500f1-p.htm (3478 words)

	Big Four auditors - Wikipedia, the free encyclopedia
		The Big 4, sometimes written as the Big Four, is a group of international accountancy and professional services firms that handles the vast majority of audits for publicly traded companies as well as many private companies.
		The Big 8 themselves were the results of earlier mergers.
		The second firm of the Big Five, Arthur Andersen, was indicted for obstruction of justice for shredding documents related to the audit of Enron, covering up millions of dollars in losses in the 2001 Enron scandal.
	en.wikipedia.org /wiki/Big_Four_auditors (861 words)

	Auditors' rotation: do disadvantages exceed benefits? -DAWN - Business; 20 September, 2004
		Smaller firms are sour that the big 8-10 firms take the cake and hold nearly 60 per cent of the audit and taxation jobs of big and multinational clients.
		The auditor must now also express his opinion on the "cash flow statement" and "statement of changes in equity together with the notes forming part thereof".
		The idea of rotation had come up several times in the council of the ICAI over the last 13 years but was invariably put off because many of the council members were also partners in large audit firms and the rotation rule would have meant uncertainty in their revenue flows from long-standing clients.
	www.dawn.com /2004/09/20/ebr5.htm (1432 words)

	JRL 3-12-02 - Russia, Business, Accounting Firms, U.S. Auditors
		But in their competitive rush for a foothold, the Big Six (now Big Five) auditors lent their reputations to practices that in the West would be regarded as unethical if not illegal, current and former employees of the firms said in recent interviews.
		In Russia, auditors "check that the paperwork was done correctly, but look right past the deeply corrupt heart of the matter," said Pyotr Karpov, the former head of the government's financial accounts commission, which investigated companies with large tax arrears.
		A team from a Big Five auditor found evidence that something like that may have been going on at a factory in the Urals.
	www.cdi.org /russia/Johnson/6129-10.cfm (1391 words)

	ERNST & YOUNG FRANCE/ANDERSEN FRANCE [2002] ECComm 56 (5 September 2002)
		Some Non-Big Five firms mentioned that a key difference between the Big Five and others resulted from their financial and commercial strength, which provides them with additional resources in terms of promotion and marketing, training, and research and which makes it possible for them to cope with the possible loss of a client.
		Finally, the position of the second tier auditors, and their ability to exert some competitive pressure at the margins, is another element against the possibility of a dominant position to be held by the merged entity.
		To a considerable extent big law firms, which either have an international network comparable to the one of the Big Five or usually co-operate with law firms in other countries are or at least could be active on this market.
	www.worldlii.org /eu/cases/ECComm/2002/56.html (10091 words)

	theage.com.au - The Age -
		The big US accounting firms were among the first foreign companies to arrive in Russia after the fall of communism.
		But in their competitive rush, the big six (now big five) auditors lent their reputations to practices that in the West would be regarded as unethical if not illegal, according to current and former employees.
		But according to the employees, as well as analysts and government officials, the auditors often played by Russian rules, thereby sacrificing the transparency that investors were counting on.
	www.theage.com.au /articles/2002/03/12/1015909850117.html (690 words)

	Big Four auditors (Site not responding. Last check: 2007-10-12)
		The Big Four are a group of international accountancy firms that handle the vast majority audits for publicly traded corporations.
		The Big Eight became the Big Six 1989 when Ernst and Whinney merged with Young to form Ernst and Young in June and Deloitte Haskins and Sells merged Touche Ross to form Deloitte and Touche in August.
		In the wake of the 2001 Enron scandal Arthur Andersen was effectively removed one of the Big Five reducing the Five to the Big Four.
	www.freeglossary.com /Big_Five_auditors (527 words)

	Big Four : How it came into existence :: Big 4 Accounting Firm \| Big 4 CPA Firm \| Big 4 Audit Firm
		The Big Four is a term coined to reflect the world's four leading accounting firms.
		The present Big 4 firms were all a part of the previous Big 8.
		The Big 8 term reflected the extensive dominance of the eight largest accounting firms in the world.
	www.big4.com /bigfour.aspx (237 words)

	Electric Deregulation - 2002 - Page 7
		Big Five accounting firms work closely with their audit clients.
		Five weeks later, she joined Enron’s board of directors, where she served on the board’s audit committee and had access to key financial information about the company.
		Five weeks later, she joined the company’s board and served on the board’s audit committee, where she would have had access to the company’s financial details.
	www.dukeemployees.com /deregulation72002.shtml (7222 words)

	TecCoach.com
		The result is that three of the five SEC Commissioners have strong ties to accounting firms.
		This includes insulating the auditors from management coercion, assessing the independence and competence of the auditors and obtaining recommendations about how to improve accounting practices.
		Audit committees exist to remind the auditors they serve the corporation, and the Board of Directors (not management) is ultimately responsible for running the corporation.
	www.teccoach.com /html/articles/b11_changesenroncause.html (853 words)

	Big five - Wikipedia, the free encyclopedia
		When the UN was formed in 1945, these five comprised a majority of the world's population, military might, and wealth, with the British Empire alone having nearly a quarter of the world's population.
		Big Five is a colloquial term for the members of the defacto Politburo Standing Committee of the Communist Party of China pre-1956.
		The Big Five was the informal name given to the top 5 players on the PGA Tour of America - Tiger Woods, Vijay Singh, Ernie Els, Retief Goosen and Phil Mickelson - from the end of 2004 until the beginning of 2006.
	en.wikipedia.org /wiki/Big_five (877 words)

	Watchdogs or Lapdogs? - CFO Magazine - May Issue 1999 - CFO.com
		Among the 10 proposals is a call for the outside auditors to be accountable to the audit committee, instead of to management.
		In addition, the audit firm would be expected to have more-detailed discussions with the audit committee about the company's accounting practices and about the nonaudit work it does for the company.
		Big Five auditors say the biggest hindrance to such a relationship is that audit committees fail to set aside enough time to do the work necessary to be effective.
	www.cfo.com /article.cfm/2989949/4/c_3046541?f=bc (592 words)

	Calling Off the Dogs - CFO.com
		In the past year, the SEC has taken action against Big Five auditors in at least three cases and named Andersen specifically for allegedly being complicit in fraud at Waste Management.
		Only 10 of the 300 SEC financial fraud cases between 1987 and 1997 named auditors at big national firms, and none of them sought action against the firm itself, according to the COSO Report.
		In fact, despite their new antifraud speciality divisions, the Big Five are also making sure that regular auditors are more alert to fraud.
	www.cfo.com /printable/article.cfm/3002364?f=options (3740 words)

	Professional Services
		As for the Big Five auditors, they'll have the freedom to pursue accounting clients and to branch into other businesses.
		Another of the Big Five, KPMG is looking to sell off its consultancy and complete a public offering it had planned for 2000.
		The lone Big Five holdout is Deloitte & Touche, which plans to run its consulting business as a separate unit.
	www.businessweek.com /2001/01_02/b3714146.htm (686 words)

	Comments of Bing Liang for the SEC Roundtable on Hedge Funds
		As the outside auditor, Arthur Andersen LLP is under harsh scrutiny for its conduct and relations with Enron.
		Further, funds with the Big Five firms as their auditors have larger fund assets than those with non-Big Five firms.
		Large funds are more likely have auditors than their smaller counterparts as their large assets and more complicated positions may also require more scrutiny than smaller funds.
	www.sec.gov /spotlight/hedgefunds/hedge-liang.htm (4924 words)

	Audit Crisis Casts Pall Over Wall Street
		Currently, all of the "Big Five" auditors either are in court or under investigation, and proposals are being pressed for audit committees to be more independent and aggressive (see sidebar, "Accounting Cases Crowd the Docket," below).
		The auditors are determined to remain self-regulatory and favor an earlier bill passed by the House that proposes a new accounting board made up of five members, only one of whom would have to be independent of the auditing profession.
		Convinced that federal regulators in Washington are too ready to roll over when it comes to big business and are being too slow to come to grips with the current crisis of confidence in the financial system, state attorneys general are taking an increasing lead in investor-protection issues.
	www.freerepublic.com /focus/news/703729/posts (2992 words)

	SSRN-Auditors' Governance Functions and Legal Environments: An International Investigation by Jong Choi, Tak Jun Wong
		This paper uses a set of firm-level data across 39 countries to study whether national legal environments increase or decrease auditors' governance functions in serving the bonding and signaling role.
		On the one hand, Big Five auditors may play a stronger governance role in weaker legal environments because they are good substitutes for legal protection of outside investors and risky firms find Big Five auditors more affordable due to lower litigation costs.
		On the other hand, a country's poor legal environment may significantly weaken the demand and supply of quality audits, lessening their role as a bonding mechanism and a credible signal.
	papers.ssrn.com /sol3/papers.cfm?abstract_id=849746 (317 words)

	CNN.com - Transcripts
		And clearly, the problem of CUC was too big a client at the auditing firm that audited its books, which was not Deloitte, by the way.
		And when you can't really trust the Big Five auditors in some cases, certainly in the case of Enron, it was very disturbing, people are going to pay more for simpler companies.
		So there were some big names out there that were beaten down to levels we haven't seen in a few years, and they were buying in those names yesterday and today.
	edition.cnn.com /TRANSCRIPTS/0202/08/mlld.00.html (7724 words)

	Top CPA Firms Information
		Before the collapse of Arthur Andersen in 2002, the auditors were known as the Big Five auditors.
		The term Big Eight was coined in the 1980s to reflect the international dominance of the eight largest accounting firms.
		In the wake of the 2001 Enron scandal, Arthur Andersen was effectively removed as one of the Big Five, reducing the Big Five to the Big Four.
	www.rungle.com /cpa_firm_guide.htm (292 words)

	USATODAY.com - Indictment could shred Andersen (Site not responding. Last check: 2007-10-12)
		A federal grand jury indicted the Big Five accounting firm Thursday on charges of obstruction of justice.
		In recent years, Big Five auditors have paid larger and larger sums of money to settle shareholder lawsuits stemming from restatements.
		On Thursday, he introduced legislation to force companies and their auditors to do a better job reporting their financials to investors.
	www.usatoday.com /money/energy/enron/2002-03-15-indicted.htm (1219 words)

	ITworld.com - Hacker's toolchest
		They often rely on untrained auditors that use canned tools, which are only as good as their updates.
		The majority of the time, the auditors don't understand the security vulnerabilities that the scanners are finding.
		RFP: Auditors should document the list of vulnerabilities they checked and say something like, "I didn't find any problems, given the time frame and this list of checks." If the list of checks was small, an explanation of why those checks were picked would probably be sufficient.
	www.itworld.com /Man/3887/swol-05-security/pfindex.html (2447 words)

	Do High Consulting Fees Compromise the Independence of CPA Firms? - Knowledge@Wharton
		According to published reports, however, the SEC is pursuing close to 260 accounting fraud investigations, many of which are aimed at large corporations that presumably utilize the Big Five as auditors.
		In a recent speech, while discussing auditor independence concerns, she noted that, "although the Commission did not charge Andersen with a violation of the auditor independence rules, the Commission’s order did summarize some of the factors that may have played into Andersen’s failure to make the hard decisions.
		Critics who say auditors may be swayed by high consulting fees were encouraged by a study conducted by the SEC’s Office of Chief Accountant.
	knowledge.wharton.upenn.edu /article.cfm?articleid=410 (1649 words)

	Who audits whom? - Jan. 11, 2002
		In a list of 10 of the most widely held stocks and the companies' independent auditors, Andersen is conspicuous by its absence.
		The Big Five have been the subject of intense scrutiny by the Securities and Exchange Commission over concerns of the auditors' independence, and in January 2000 an SEC review concluded many of the partners at accounting firm PricewaterhouseCoopers owned stock in the companies it was auditing.
		In June 2000 all Big Five companies agreed to a self-audit to determine whether they were in violation of rules that prevent senior officials from owning shares of companies they are examining.
	money.cnn.com /2002/01/11/companies/auditors/index.htm (534 words)

	2003 Annual Meeting of the American Accounting Association (Site not responding. Last check: 2007-10-12)
		Our auditor choice and audit fee results support the legal cost hypothesis that Big Five auditors charge a higher risk premium and are more likely to turn away risky clients in strong legal environments than in weak legal environments.
		We also find that the complementary effect outweighs the legal cost effect in that strong legal environments do not reduce the market share of high quality auditors, but they enhance the development of capital markets, which in turn creates a higher demand for quality audit service.
		Our general sample results show that firms in strong legal environments, ceteris paribus, are more likely to hire Big Five auditors than their counterparts operating in weak legal environments.
	aaahq.org /am2003/abstract.cfm?submissionID=782 (155 words)

	The Idler, A Web Periodical 8-9
		CUC was audited by Ernst and Young, like Andersen, a big five accounting firm.
		Drabinsky had used KPMG, another of the big five auditors, as his personal accountants and they had found no evidence of wrongdoing at Livent prior to its sale to Ovitz and company.
		Because of the big names involved the Livent story got brief play in the media and then died.
	www.the-idler.com /IDLER-02/8-9.html (937 words)

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