English
Nederlands15-10-2010 |
The European Commission is considering a forced break up of the Big 4 accountancy firms and a ban precluding auditors from providing advisory services. VMW Taxand endorses these proposed measures as they will improve efficiency and encourage reasonable pricing and innovation in the tax advisory market. European Commission Green Paper Audit Policy: Lessons from the Crisis Background On October 13, 2010, Michel Barnier, Commissioner for the Internal Market, published a so-called Green Paper in which he announced that the European Commission is considering rigorous measures to re-establish auditors’ independence and competition. The measures considered could include a forced break up of the Big 4 accountancy firms and a ban precluding auditors from providing advisory services. Taxand endorses the Green Paper as the current global audit and tax advisory market is an oligopoly that we believe undermines efficiency, reasonable pricing and innovation. Taxand formed a global organisation of tax advisors five years ago to provide high-quality tax advice on a global scale, independent from auditors. This network spans almost 50 countries, with over 2,000 tax advisors. Global audit and tax advisory market: an oligopoly The global audit and tax advisory market is dominated by the Big 4 accountancy firms. These four firms audit 90% of all global operating entities. In the slipstream of these audits, Big 4 firms sell global tax advisory services. As in any oligopoly, a dominant position undermines efficiency, reasonable pricing and innovation at the expense of customers. Market dominance also entails an accumulation of systemic risk, and the collapse of a systemic firm could disrupt the whole market. These are the reasons why the Commission is considering the following measures:
The first two measures, in particular, will affect the market for global tax advisory services that is also dominated by the Big 4. Taxand’s Take At VMW Taxand we believe that multinationals should be able to choose between more than just four global tax advisory firms and that is why Taxand set up a worldwide organisation of tax advisors. We believe that companies deserve an advisor who strives to work efficiently, who develops pricing mechanisms for mutual benefit and who devises new methods to improve the quality of the advice provided. A ban on advisory services provided by auditors, and a forced break up will result in a great number of global tax advisory firms,. This will intensify competition in the tax advisory market. As Taxand started the competition five years ago, we are well-prepared for the free market. Please Read the attached Green Paper and let us have your opinion by replying to: greenpaperyes@vmwtaxand.nl « Back |