Samuel DiPiazza.

The Chief Executive of Big 4 accounting firm PricewaterhouseCoopers said on Wednesday that he expects more non-financial US companies to report writedowns related to the credit crisis, underlining the extent of the contagion of the subprime debacle.

"It's not just in banks," Samuel DiPiazza said in response to questions from reporters. "These securities sit in cash equivalent accounts of industrials; they sit in investment portfolios of pensions."

"We are having to deal with this with thousands of companies, not just a handful of big banks," he said, and added that a "first wave" of writedowns was likely in the current audit cycle this quarter.

The world's largest banks have already incurred more than $140 billion in writedowns of subprime-related securities and losses have spread beyond banks. Bristol-Myers Squibb Co., the drugmaker that reported a quarterly loss Jan. 31st, wrote down $275 million of AAA-rated securities backed by subprime mortgages. Similar charges have surfaced at Ciena Corp., a maker of networking equipment, and Apex Silver Mines Ltd., a silver producer in Bolivia, Peru and Mexico.

DiPiazza declined to comment on how big he thought such writedowns in non-financial firms would be, saying it varies with companies.

"I will not underestimate the challenge we have working through a lot of complex securities and getting them valued," he said. "We have to ask the question, what's under the surface?"

DiPiazza said that marking assets at “fair value” – the value they would fetch on the market – is particularly difficult because of volatility and lack of liquidity in a number of securities.

“Now that the markets are moving rapidly, the trading in the securities is thin and the collateral . . . is fragile, that makes for a tough audit,” he said.

However, he defended “fair value” accounting – blamed by some analysts for exaggerating the size of the recent writedowns – and said that auditors were equipped to deal with the current problems.

DiPiazza also said he thought large US companies could move from domestic accounting rules (US GAAP) to international financial reporting standards (IFRS) within five years – a faster timetable than that indicated by US regulators.

“The Europeans did it in five years. I would find it difficult to think that the Europeans are that much more capable than the Americans,” he said. “It is certainly possible for all large-cap companies to be in IFRS by 2015.”

Christopher Cox, chairman of the US Securities and Exchange Commission, has said the SEC will set out plans this year for how to manage the move.

Companies with international operations support the change but smaller groups are more concerned about the costs it will bring.