The Competition Commission has proposed new plans to help bring more competition into the auditing market, after it was discovered that KPMG, Deloitte, PwC and Ernst & Young audit 90% of the UK’s largest stock market-listed companies. The regulator has become increasingly concerned that the four firms are too dominant and do not always meet shareholders’ needs.The Competition Commission have suggested that all major UK-listed companies must allow accountancy firms to bid for their audit work every five years. It believes that putting the work out to tender regularly will help to break up the dominance of the big four accountancy firms. Laura Carstensen, chairman of the Audit Mark Investigation Group, said “More frequent tendering will ensure that companies make regular and well informed assessments of whether their incumbent auditor is competitive and will open up more opportunities for other firms to compete.”“A more dynamic, contestable market will reduce the dangers that come with overfamiliarity and long, unchallenged tenures,”
she added.The report will continue as part of an ongoing investigation into the audit market. The findings and plans will then be put out to public consultation with final recommendations issued later in the year.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with business law solicitors in Birmingham and across the country.