Comment: Less than 20 years ago, we had eight accounting firms competing for large corporate auditing business - the so-called Big Eight. Then, through merger and amalgamation, we went progressively to the Big Six, the Big Five and finally, in the wake of the Enron collapse and the demise of Arthur Andersen, the Big Four.

Now, auditing worldwide is dominated by those Big Four - PricewaterhouseCoopers (PwC), Deloitte, KPMG and Ernst & Young - to the extent that every one of the top 100 public companies in Britain is audited by one of them.

In Ireland, the situation among listed companies is virtually the same - and in the rare event of one of the Big Four accounting firms losing an audit contract from a major Irish company, one can be reasonably sure that it has been lost to one of the other three.

A variety of regulatory and representational organisations in Britain - the National Audit Office, the Association of British Insurers and the Hundred Group, a powerful club of chief financial officers - have publicly criticised the Big Four's stranglehold on audit contracts. And a report produced by the consultancy group Oxera has illustrated the effects of such concentration of auditing in the British market.

Given our similarities, it is not unrealistic to expect that Oxera's conclusions about the British auditing market apply equally to Ireland.

Oxera concluded that the choice available in Britain to audit users was limited and that a number of British companies - especially in the financial services sector - effectively had no choice in their auditor. If financial services organisations in Britain have little choice, in Ireland the situation is probably even more restricted. Four big domestic banks, none of whom for obvious reasons would want to share an auditor with a competitor, four major audit firms! Enough said.

And what would happen if one of the Big Four ceased to operate in the Irish market? The situation would become even worse. Oxera also noted that entry or expansion by mid-sized accounting firms (we in Mazars are in this tier of the audit market) into the major corporate sector is unlikely due to barriers of entry.

The risks identified by Oxera clearly apply in the Irish market as much as they do in Britain - limited choice, increased potential for conflict of interest and a possible threat to the integrity of the system if the profession encountered another shock along the lines of the Andersen collapse.

It is surely incumbent on the accountancy profession in this State to at least consider the implications of those risks.

First of all, how do non-Big Four firms, like Mazars, counter the incorrect supposition in Ireland's corporate boardrooms that only the Big Four firms have the experience, resources and expertise to provide a first-class service and that misconception that many auditing jobs are too international or too complex to be handled by the mid-sized auditors?

To many major companies, a Big Four sign-off of the accounts is akin to a seal of international approval. That perception must change and be proved as incorrect. It is up to the profession and mid-sized auditors to ensure that this happens and that there is a clear response by all to the needs of major companies.

One answer is that audit firms outside the Big Four have to differentiate themselves by developing the capacity to audit major companies in specific sectors where they have the skills. The challenge for the mid-tier firms is to prove that bigger is not necessarily better and that focused sectoral expertise and specialisation offers large companies the same if not greater assurance than that offered by a more generalist approach.

Another approach to addressing the risks identified by Oxera might be joint audit. A revolutionary and unworkable situation, the Big Four might opine, but this isn't a sentiment echoed by all. The first report of the Committee of Public Accounts into DIRT recommended just that - a system of joint audits for the banking industry.

Regrettably that recommendation from the CPA was not followed through with the required enabling legislation but I believe it offers a realistic mechanism of dealing with the risks identified by Oxera.

A joint audit regime would offer the client more choice, enhanced service levels and an opportunity to diversify risk. It would also give the mid-tier firms the incentive to continue to invest in the required expertise to service the auditing needs of major clients.

To those who might suggest that joint audit would mean more cost for the client, there are clear and transparent mechanisms that can be put in place to ensure that joint auditors arrange their work to insulate their clients from additional cost and risk. Joint audits are common practice with some of the largest international European companies and Mazars itself is audited by two separate firms resulting in a better response to our requirements for no extra cost.

Joint audit might not be a very palatable prospect for the auditing status quo in Ireland but we, as a profession, run the risk of ultimately failing our clients if, at the very least, we do not look at ways of addressing the current concentration of auditing power and the resulting market imbalance.

Joe Carr is managing partner of Mazars