Claims of Big Four firms approaching rival
clients and offering cheaper audit fees are causing a stir in the

Earlier this month, PricewaterhouseCoopers
(PwC) claimed in Dutch newspaper Financieele Dagblad that
some of its clients were approached by Ernst & Young (E&Y)
with significantly reduced quotes for carrying out audit work.

The spat has arisen in part due to new
disclosure rules, which came into effect this year, requiring
listed companies to disclose how much they paid for audit, tax and
other advisory work.

PwC chairman Robert Swaak said there was
already an issue with fees because the market was very competitive
but this was exacerbated by the way Ernst & Young went about
approaching PwC clients.

“It’s not the ‘royal’ way they treat our
clients. The facts are that we have examples of the way Ernst &
Young approached our clients and that is not our way,” Swaak

PwC said unless an audit was up for tender, it
did not think it was appropriate to approach rivals’ clients. Swaak
said the issue had prompted the firm to explain to clients why its
services cost the amount they do.

E&Y Netherlands country managing partner
Pieter Jongstra said undercutting rival’s audit fees was not an
E&Y strategy but clients had demanded fee reductions of up to
30 percent in some cases. He added the firm maintains “contact with
all major organisations in the Netherlands”.

“The issue for an organisation to select its
audit firm is on the capability of the audit firm to organise the
work processes as flexibly, efficiently and internationally as
possible. Maybe that has a price effect but we are not undercutting
the price,” Jongstra said.

“In this market, you have a conversation with
the client based on what they can do themselves, what the auditor
has to do; there is more pressure on price… it is not on the hourly
price but the work they would like to be performed by the