PWC merger

From: Nagindas Khajuria

Sent: 01 July 2008 13:54

To: 'Accountancy Age Editor'

Subject: Boyle brands PwC merger 'unfortunate'

Sir

I fully agree with Mr Boyle, CE of Financial Reporting Council, that the 10th anniversary of the merger between Price Waterhouse and Coopers and Lybrand should make us re-think how such mergers are approved. At that time, I felt very strongly that outsiders like myself who are from smaller audit firms should be allowed to also review the 700-page justification document that was sent to the EU Competition Commission.

I then argued that the Financial Reporting Standards then were not fully in place to address the global issues, etc. and those should be addressed first and the mergers could be considered a few years later. KPMG and Ernst & Young had also applied at the same time.

The recent credit crunch in the banking sector where hundreds of banks have written off over 400 billion U S Dollars on long term loans, just in the past six months, indicates that the Big Four, because of their size, have not been able to discover all these weaknesses over the past 10 years. It is not a healthy audit environment. We need about 10 big audit firms, esp. as the Big Four audit 97% of the entire world’s major firms.

Your paper may wish to publish my letter dated 7 February 1998 and the EU Competition Commission reply dated 12 March 1998 verbatim in your newspaper. It may make interesting reading for all. Both are attached in PDF format.

Regards

Nagin Khajuria, FCCA

Director, Simplification Made Simple Limited

Chartered Certified Accountants & Statutory Auditors

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