THE Big Four accounting firms will learn this week whether the UK Competition Commission plans to shake up the industry to give smaller challengers a better shot at winning audit work.
KPMG, PwC, Ernst & Young and Deloitte, which together audit all but a handful of Britain’s biggest firms, have told the commission that the industry is already competitive, giving firms adequate chance to change auditor.
The House of Lords found in 2011 that the average listed company keeps the same auditor for 48 years.
“What we’re hoping for is a package of interconnected reforms that would help create a more level playing field, giving additional firms a chance to prove themselves,” said David Herbinet, a partner at Mazars.
The commission, which started its probe in 2011 and has twice delayed reporting its findings on the audit market for FTSE 350 firms, said it hopes to reveal its recommendations this week.
The findings will be closely examined by politicians in Europe, who have drafted laws that would force companies to rotate auditor every six years.
The UK’s Financial Reporting Council already wants firms to put their audit contract out to tender once a decade.