Accounting Community Supports KPMG
With the US government’s case against KPMG settled, the battered firm can refocus its efforts on its core businesses. Enabling this refocusing is a series of internal mandates that have rippled across Deloitte & Touche, Ernst & Young, and PricewaterhouseCoopers.
Leadership in each of these firms has instructed the respective partners not to take advantage of KPMG’s weakened condition. There does not appear to have been any collusion between the other members of the Big Four, and smaller accountancies have supported this position.
Deloitte & Touche, Ernst & Young, and PricewaterhouseCoopers agree on the importance of KPMG’s continued success. The large accounting firms have received intense criticism since the implosion of Andersen as to the lack of competition and increased concentration of service providers.
The collapse of KPMG would have been problematic both for public companies and the Big Four. With audit fees already soaring as a consequence of Sarbanes-Oxley, the loss of a competitor in the Big Four would have resulted in a concentration of power that could only drive the price of audit and tax services upward. Further, the Big Four feared that the loss of KPMG would bring unwanted government intervention.