Lords told big four auditors pose systemic risk to British economy

THE dominance of the “big four” auditing firms poses a systemic risk, the House of Lords Economic Affairs Committee was told yesterday.

Managing partner of auditor BDO Simon Michaels said: “If one of the big four were to exit the market, without a plan B, there could be chaos.”

The lords were asking about the concentration of business among auditors Deloitte, KPMG, Pricewaterhouse- Coopers and Ernst & Young as part of a review of competition in the industry. The committee will produce a report that could recommend regulatory changes.

However, others do not agree that there is a problem. RSM Tenon’s Russell McBurnie said: “As a multinational, you’ve got four choices – you have four quality firms.”