The reliance of big business on the services of the top four audit firms is a major risk for the profession and for business, according to a partner in one of the largest second-tier Irish firms.
Aidan Connaughton, head of risk management at Grant Thornton Ireland, said the concentration of work among a small number of audit firms created dangers should there be another Andersen-style collapse.
"The feeling is globally that four is too few," Mr Connaughton said. The collapse of one of these firms "would leave the audit market here in turmoil".
KPMG, PWC, Ernst & Young, and Deloitte are the top four accountancy firms in the world and the firms most favoured by public limited companies (plcs) and big business.
Mr Connaughton said he believed his firm, which is part of a global membership organisation, was big enough for the type of work normally done by the big four firms. "We are ideally placed to serve the needs of Irish and international business."
He said he believed that the directors of large companies felt more comfortable using the services of the big four firms. "There seems to be a reluctance in the market to engage our services."
Research in the US for Grant Thornton had found no negative stock price reaction when companies switched from one of the big four to Grant Thornton US, he said. Mr Connaughton welcomed the recent decision to refer the issue of the current auditor liability regime to the Company Law Review Group.
