Study on the economic impact of auditors’ liability regimes

Practice area: Finance | Financial markets and Institutions
Client: EC DG Internal Market and Services
Published: September, 2006
Keywords: qualitative analysis quantitative analysis stakeholder surveys and consultations

This study focuses on the market for statutory audits of large companies in Europe. It reviews first the state of the international market for audit firms in the EU. Next, it examines the insurance market for statutory audits. It then examines the likely short-run and long-run effects of the possible disappearance of one or more of the Big-4 firms. Next, it focuses on the economic impact of alternative auditor liability regimes. Finally, it reviews and assesses different options for limiting auditors’ liability.