1) Under the recent budget proposal for the fiscal year 2021, the Trump administration has proposed rolling up the U.S. audit regulator (i.e., the Public Company Accounting Oversight Board or PCAOB) into the Securities and Exchange Commission (SEC). The purpose of this transfer of authority is to eliminate duplication between the two regulators and reduce regulatory ambiguity. Please discuss the costs and benefits of this proposal.

2) Currently, Big Four Accounting firms (including PricewaterhouseCoopers, KPMG, Ernst & Young, and Deloitte) dominate the audit market. In fact, more than 80 percent of audits are performed by the Big 4 accounting firms. Do you think the dominance of Big 4 accounting firms is good for the audit market? Please provide explanations for your answer.