Washington, D.C. -- The audit market for large public companies has become more concentrated among the Big Four firms, but not enough to require corrective action, according to the Government Accountability Office.

The GAO found that 82 percent of large public companies saw their choice of auditor as limited to three or fewer firms. About 60 percent view competition in the market as insufficient. Most small public companies, however, said that they were satisfied with the auditor choices available.

According to the GAO's analysis, the largest accounting firms audit 98 percent of the 1,500-plus largest public companies, those with annual revenues of more than $1 billion. In contrast, midsized and smaller firms audit almost 80 percent of the 3,600 smallest public companies, those with annual revenues of less than $100 million.


Washington, D.C. -- The Mortgage Bankers Association has written to the Financial Accounting Standards Board asking for more flexibility in accounting for troubled mortgages to help prevent foreclosures. The MBA wants to be able to measure impairments of residential mortgage loans that are troubled debt restructurings under Financial Accounting Standard 5, Accounting for Contingencies, rather than FAS 114, Accounting for Creditors for Impairment of a Loan. The MBA argued that if the number of home mortgage failures had been anticipated, the accounting rules would have been more flexible to include more troubled debt restructurings.


London -- The International Accounting Standards Board has issued a revised version of its standards for accounting for business combinations such as mergers and acquisitions, in coordination with the Financial Accounting Standards Board. While FASB has not yet issued its own revised standards, they're expected to closely resemble the IASB's new ones.

The rules for both boards will tighten up how fees charged for a merger can be expensed. Acquisition-related costs must be accounted for separately from the business combination. The boards have also agreed to simplify the measurement of goodwill in a step acquisition.

Changes in U.S. GAAP to bring it into line with IFRS include classifying non-controlling interests as equity, and requiring restructuring charges to be accounted for as they are incurred, rather than allowing them to be anticipated at the time of the business combination. Each asset and liability in a partial acquisition must be measured at 100 percent of its fair value. Gains on a bargain purchase are now recognized as income, rather than being allocated to some of the acquired assets. Other changes require in-process research and development to be recognized as a separate intangible asset, rather than immediately written off as an expense, and align the U.S. GAAP acquisition date with the date in IFRS, moving the date to when control is achieved, rather than the agreement date.

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