GOVERNMENT minister Ed Davey told a House of Lords inquiry yesterday that moves to make the “big four” auditors less dominant in the market should be voluntary before more regulation is tried.
Davey, minister for government relations, said “demand-side” measures to help mid-sized audit firms to grow should take precedence over regulation to improve competition.
He said the government was very concerned about competition in the audit market but did not want “heavy handed” rules such as the European Commission proposal to force companies to change auditors .
The Lords is investigating whether Deloitte, Ernst & Young, KPMG and PwC stifle competition in the UK, where they audit 99 per cent of the FTSE 100.
Davey added that the government saw no need for a pan-European regulator of auditors.