Doesn't Size Matter when it comes to Auditors?

OK, I’m a credit reference agency man, not an accountant, but something strikes me as wrong about the fact that on both sides of the Atlantic, little accounting firms are allowed under current rules to audit billion dollar businesses. Firstly, the news broke soon after the Madoff fraud was unveiled that his 50 billion dollar exclusive fund was being audited by a one man band called Frieling and Horowitz , operating out of a tiny office in up state New York. Then, in the last couple of days , we discover that Allen Stanford’s business was audited by a tiny outfit with a London and Antigua office called CAS Hewlett + Co.

I’d be interested to know how, for instance, a high street accountancy firm would react if someone came in to their office one day to ask whether they would like to audit their 10 billion pound business? Would they jump at the chance, or would they politely decline the offer and smell a rat?

I presume that if an accountant holds an Auditing Practising Certificate, he would be quite entitled to take on the work, but is this right? Any feedback would be interesting.