In a report sent to Congress, the GAO indicated that 86% of companies surveyed said there should be more than four major accounting firms. About three-quarters pegged the ideal number at between five and eight.

More than 80% of the companies considered four to be the absolute minimum number of large accounting firms required to audit public companies, the GAO said. Many respondents said the true number of potential auditors is actually fewer because not all members of the Big Four have the expertise to serve every type of industry in all sections of the country, the report noted.

The GAO said that 94% of the public companies would have three or fewer options if required to switch auditors.

Despite the desire for more competition, most of those surveyed were against government action to manipulate the market to increase the number of auditors.

Only 22% of the responding companies said that some action should be taken to increase competition in the industry. Some of the suggestions companies had to increase competition included encouraging regional firms to develop a national organization. One company suggested seeing some of the biggest firms broken up.

Nevertheless, 62% of the companies said the status quo should remain and no action should be taken.

The GAO noted that the Big Four accounting firms currently audit 78% of U.S. public companies. According to the report, the 159 respondents were for the most part satisfied with their current auditor, with about half having used their current auditor for more than 10 years. Apart from former clients of Arthur Anderson, few of the polled respondents had switched auditors in the past decade.

The auditing industry has been shrinking with many small to medium auditing companies exiting as auditing fees rose in the wake of implementation of the Sarbanes-Oxley Act of 2002. Additionally, those responding to the survey raised concerns about the future implications of further consolidation, especially related to limitations on a choice of auditor.

"A significant majority of respondents said that their companies would not use a non-Big Four accounting firm for audit services," the report said. Despite their concerns, however, most of the companies responding to the study said they favored allowing market forces to dictate the level of competition.

-- Donna Block in Washington