Redividing the audit pie.

Bigger Pieces of the Audit Pie

Before the Big 8 mergers of 1989, no firm controlled more than 16% of the audit market for publicly traded companies. After the mergers, this percentage increased to 19%. If the proposed mergers of Ernst & Young with KPMG Peat Marwick and of Coopers & Lybrand with Price Waterhouse take place, the largest firm will handle 34% of all public company audits. Note, however, that in the last decade the share of the other firms has hardly changed.

Source: Research from Jeff L. Payne, CPA, PhD, assistant professor, University of Mississippi, and Morris H. Stocks, CPA, PhD, associate professor, University of Mississippi. Data compiled from Standard & Poor’s Compustat for NYSE, Amex and NASDAQ.