Up until 1989, there existed “the Big Eight” accountancy firms namely the eight major international accountancy firms, Arthur Young (AY), Ernst & Whinney (EW), Deloitte Haskins & Sells (DHS) ,Touche Ross (TR), Price Waterhouse, Coopers and Lybrand, Arthur Andersen and KPMG. At present, there remain only four; these four comprise of Ernst & Young, Deloitte & Touche, Pricewaterhouse Coopers and KPMG. Four of the Big Eight accounting firms merged to create two firms in 1989. The four firms consisted of Arthur Young (AY) and Ernst & Whinney (EW), which merged to form Ernst & Young (EY), and Deloitte Haskins & Sells (DHS) and Touche Ross (TR), which merged to form Deloitte & Touche (DT). This resulted in the “Big Six”. The merger between Price Waterhouse and Coopers & Lybrand which resulted in Pricewaterhouse Coopers and the Enron debacle which lead to Arthur Andersen being made defunct have resulted in the “the Big Four”. Whilst the existence of the present “Big Four” that is, Pricewaterhouse Coopers, KPMG, Ernst & Young and Deloitte & Touche, occurred mainly as a result of mergers between these accountancy firms, the demise of Arthur Andersen, its role in the collapse of Enron, and the devastating effects on so many lives, cannot be ignored. This publication considers through a comparative analysis of selected jurisdictions, how the external auditor can assist regulators in carrying out their regulatory and supervisory functions. It also considers how regulators could implement their supervisory and enforcement tools in addressing the issue of audit liability.
