EPILOGUE

The issue of "How Many Firms" continues to have relevance as companies engage Big Four firms in a number of roles. For example, in $2011,$ Hewlett$-$Packard $($HP$)$ acquired British software company Autonomy. Following the acquisition, HP accused Autonomy of "accounting improprieties, misrepresentations, and disclosure failures" that led to an inflated purchase price and subsequent write$-$down. Autonomy was audited by Deloitte, HP was audited by EY$,$ and KPMG provided HP with due diligence on the acquisition. To complete the picture, PwC has been hired by HP to "clean up the mess"! $12$ In $2019,$ as GE considered replacing long$-$time auditor KPMG $($KPMG and its predecessors had served as GE's auditor since $1909!),$ the fact that other firms provide extensive tax services $($PwC$),$ lobbying efforts $($EY$),$ and have significant business relationships $($Deloitte$)$ once again reveals the difficulties that would emerge if a further reduction in the number of large accounting firms occurs.

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DISCUSSION QUESTIONS

Do professional standards allow a company's auditors also to provide tax services and retain their independence?

How have provisions of the Sarbanes$-$Oxley Act limited a public company's choice of auditors?

What are some of the advantages and disadvantages of permitting auditors to provide nonaudit services $($such as tax services$)$ to clients?

What is the impact of a smaller number of major international accounting firms on public companies?