The commission is expected to set out a longer timeframe for the so-called mandatory tender rules, which are intended to crack open a market where 99 of the FTSE 100 companies use the same four audit firms and contracts often endure for decades without challenge from other accountants.
The five-year requirement was met with protests from the so-called big four as well as from blue-chip companies and their investors when it was set out in July, and the CC is set to alter the proposal in today’s report.
Large auditors had argued that a five-year rule would merely introduce extra costs for businesses and end up as a box-ticking exercise in an industry that is already very competitive.
Smaller rivals such as Grant Thornton and BDO, meanwhile, had claimed that the changes did not go far enough to disrupt the Big Four’s dominance of the statutory audit market among large companies.
The UK changes could still be overshadowed by European proposals, which have also been watered down several times but could see firms forced to switch auditor every 14 years, rising to 25 years in certain circumstances.
These rules are inching their way through the European machinery as competition head Michel Barnier tries to get the changes signed into law this year, following several years of wrangling.
Today’s report will also reveal the CC’s position on “Big Four-only” clauses, which have been used in loan contracts to force companies to have their books checked by either PwC, KPMG, Ernst & Young or Deloitte.
The CC is expected to keep its ban on such commitments.
The plan is the product of more than two years of work, prompted by a referral from the Office of Fair Trading.