Late last month the Financial Times (September 26) reported [free registration required] that the European Commission has launched draft regulation to address what many have long considered inevitable. The Big 4 are under inexorable pressure to choose between consultancy and audit. As the end-game approaches we predict ever-greater efforts by all the Big 4 to diversify into all manner of advisory services, so that come the day of complete separation their massive scale will be intact and their transformation into diversified professional service firms, in a sense, complete.
For the clients, the corollary is that audit fees will rise to enable the now 'pure' auditors to generate profits commensurate with the skills and responsibility involved.
Any bets how long the battle between the world's regulators and the profession will last? And who will 'win'?