The Big Four: Can't Touch This?

Brotman, for instance, believes that some Big Four partners will split off and form niche firms in coming years that will cater to individual sectors, such as the financial services industry.

But Glass Lewis' Turner thinks such forecasts are "pipe dreams." The big public companies need auditors that have international offices, which generally only the Big Four have. Setting up that international presence would be prohibitively expensive for any of the smaller players -- or for niche firms, he says.

Still, Turner says regulators shouldn't let the present lack of competition limit their options in dealing with accounting firms that go astray, arguing that prosecutors should remain open to indicting accounting firms when needed. Regulators could force the breakup of the Big Four to introduce more competition, he notes.

In addition, Turner says individual indictments can make it difficult to secure a conviction, as seen recently in the case against former HealthSouth CEO Richard Scrushy, he says. Meanwhile, current regulations don't go far enough to ensure that accounting firms will act in the public interest, Turner says.

Because the accounting firms are private partnerships, they don't have to adhere to many public-company rules, which include having a majority of independent directors. But because of their status as regulated companies, they could be required to do so, Turner says.

"It's only when you get that outside board that you get a change in culture at these firms," he says. "Without that, you won't have it."

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