Rethink Merger Approval

Letter to the Editor of Accountancy Age

Published on 10 July 2008 on page 12:

Rethink merger approval

I fully agree that the 10th anniversary of the merger between Price Waterhouse and Coopers and Lybrand should make us rethink how such mergers are approved (26 June page 1).

At that time I felt very strongly that those from small audit firms should be allowed to also review the 700-page justification document sent to the EU Competition Commission and the fact that Financial Reporting Standards were not fully in place to address global issues and these FRSs should be addressed before merger could be considered.

The recent credit crunch where banks have written off more than US$ 400 billion on long term loans 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 ten years.

It is not a healthy audit environment. We need about ten big audit firms, especially as the Big Four audit 97% of the world’s major companies.

Nagin Khajuria FCCA