Global securities regulators are set to probe the risks of private equity investments in audit firms, intensifying scrutiny of the rising number of buyouts in the financially sensitive sector.
In recent years, private equity groups — attracted by their strong cash flows and the perception of a fragmented market ripe for consolidation — have snapped up stakes in auditors and increased their valuations.
But the flurry of mid-tier deals has triggered concerns about a deterioration of audit quality and the potential for conflicts of interest at accountants.
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