Marketing Issue Report: Impact of Big Four Auditors' Practices

This report examines a critical marketing issue related to the big four auditing firms: PwC, KPMG, EY, and Deloitte. The central problem revolves around these firms charging high fees while allegedly failing to provide adequate public value, as highlighted by a watchdog report. This failure leads to job losses, reduced tax revenues, and other significant consequences. The report identifies key stakeholders, including the watchdog, Competition and Markets Authority (CMA), clients, creditors, and employees affected by the audit failures. The analysis then proposes a response focusing on charging appropriate fees based on value delivered, emphasizing knowledge and growth, and implementing meaningful reforms. The response is grounded in ethical standards and the importance of ethics in marketing for building credibility and brand value. The report stresses that unethical marketing practices by these firms can diminish their corporate image and threaten their sustainability.

Running Head: MARKETING ISSUE 0
MARKETING
MANAGEMENT AND
DIGITAL COMMUNICATION

MARKETING ISSUE 1
Marketing issue illustrated in the article
This article is related to the big four auditor firms i.e. PwC, KPMG, EY and Deloitte
who are the four biggest professional service networks in the world offering financial and
auditing services to various business organisations and enterprises. These four firms audit
97% of FTSE 350 firms and accumulate 99% audit fees (Sikka, 2019).
The marketing issue that was found in this article considering these accounting firms
is connected with delivering no much public value instead of charging high fees. As per the
watchdog report, it was found that these companies are collecting huge fees in the name of
auditing and not providing the actual issues connected with the corporation that results in job
loss, tax revenues, pensions and many other big issues.
Moreover, any sort of compensation cannot be claimed by the victim of these failures
as they pertain no legal resources as auditors state their job only towards the organisation that
rents their services, not any creditor or stakeholder.
It is important for a company to understand that the price they are charging for their
product or service is one of the most important business decisions as it offers them a
perception to offer equal value to that charge price (Kim, Xu & Gupta, 2012). The audit
failure of these firms has shown that the permanency of auditors’ term in office results in
closeness with directors and impairs their scepticism. Such unethical marketing practices will
lead in diminishing of their corporate image in the marketplace and may also threaten their
sustainability.
Important stakeholders
Stakeholders are known to be members of groups which can affect or be affected with
the enterprise actions, policies and objectives. Some example of key stakeholders include
employees, clients, government, creditors, union and the community from which the business
draws its resources (Doherty, Haugh & Lyon, 2014).
In this article, important stakeholders are Watchdog, CMA, creditors, clients and
corporates and the employees who get impacted. In this, watchdog is known to be a

MARKETING ISSUE 2
committee whose job is to make sure that organisation do not act irresponsibly or illegally.
These big four auditors that were failing to offer any sort of public value was reported by
Watchdog. In addition, the CMA (Competition and Markets Authority) is a non-ministerial
government department responsible for strengthening corporate competition and preventing
and decreasing anti-competitive practices. However, in this case, this authority also failed to
address the fundamental issues relating to competition or audit quality. They do not even
address the central issue and without these potential liabilities, audit firms have insufficient
economic incentives to enhance the quality of their work. Clients and corporates spotlight
feature these auditors successes in an impactful and engaging storytelling way. Considering
this article, these clients are those who are all audited by these big four accountancy firms
and pay for their audit fees. Last stakeholders include group of employees who lose jobs due
to the fragility of these auditing firms.
Response to these issues
In response to these issues, I would prefer to charge appropriate fees from the clients
in relation to their auditing and offer true value to both the clients and the public. This true
value can be delivered by being explicitly about the growth plans, moving beyond marketing
of services as a product and marketing the knowledge fiercely. This will significantly reduce
the impact on various areas such as employee losing jobs, tax revenue of clients, savings and
so on.
I would also like to implement meaningful reforms that are being taken off the agenda
and fit the right standards established by CMA. The reason to respond in this way is because
of various ethical standards set under ASIC Code of Professional Conduct and other major
authorities. In addition, ethics in marketing plays an important role for any corporation or
firm as it brings out various benefit such as long term gains, building of credibility, exploring
rich culture, attracting right talent and strengthening brand value (Jones et al, 2008).

MARKETING ISSUE 3
References
Doherty, B., Haugh, H., & Lyon, F. (2014). Social enterprises as hybrid organizations: A
review and research agenda. International Journal of Management Reviews, 16(4),
417-436.
Jones, P., Clarke-Hill, C., Comfort, D., & Hillier, D. (2008). Marketing and
sustainability. Marketing Intelligence & Planning, 26(2), 123-130.
Kim, H. W., Xu, Y., & Gupta, S. (2012). Which is more important in Internet shopping,
perceived price or trust?. Electronic Commerce Research and Applications, 11(3),
241-252.
Sikka, P. (2019). The big four auditors are failing – and the watchdog’s report won’t change
that. Retrieved from https://www.theguardian.com/commentisfree/2019/apr/18/big-
four-auditors-failing-watchdog-not-fit