Why the Big 4 continue to gain in audit industry

Restrictive provisions in the Companies Act might prove to be a windfall for the Big 4 auditors in India

Efficiency of any audit market is broadly measured by audit quality. Audit quality, in turn, depends on the ability to identify misreporting and errors in financial statements and willingness to report such errors and/or misstatements. While the first factor relies on the skill and competence of auditors, the second one depends on the independence of auditors. The evolution of the global audit market over the past three decades showed the concentration of the industry — from Big 8 to Big 4 auditors.

The audit market in India is no different and is characterised by three features — dominance of Big