GAO Study Dissects Market for Final 4

A long-awaited study from the General Accounting Office shows the Big 4 auditing firms may be both more powerful and more vulnerable because of their growing consolidation of the market.

Powerful -- because they could, although there is no evidence that they have, amass the economic influence of any oligopoly. But vulnerable, too -- because they remain bitter and vicious competitors.

Still, concentration in some industries is marked. The GAO noted, for instance, that Ernst & Young holds 61 percent of the building contractors and 48 percent of air transports, that PricewaterhouseCoopers has 76% of the petroleum and coal business, and that KPMG audits 60 percent of the non-bank financial institutions.

With new independence rules barring auditors from a host of consulting engagements, it could take years for auditors and companies to sort it all out.

Full report in pdf