Wednesday 13 February 2019 12:28 pm

Big Four accountants face Australian competition probe

The Big Four accountancy firms face fresh global pressure as an Australian probe investigates whether they have operated as a cartel in the country.

The Australian Competition and Consumer Commission (ACCC) contacted Deloitte, EY, KPMG and PwC late last year to request information, in order to determine whether a full inquiry is needed, the Australian Financial Review (AFR) reported.

Read more: Big Four accountants push back against breakup proposals


Australia’s Labor party called for the ACCC to begin an investigation into how the firms – all of which are part of giant global networks – go about winning government work, and to examine potential conflicts of interest between their consultation and audit businesses.

The widening probe in Australia will add to pressure on the Big Four, which have gradually diversified away from their traditional role as auditors to more broadly encompass services such as consultancy and tax advisory roles.

The Big Four are already subject to a competition probe in the UK, where the regulator is exploring ways to end their dominance of audit contracts for top listed companies. Together, they audit 97 per cent of the FTSE 350.

Read more: EY and PwC ban consultancy for audit clients as MPs blast Big Four bosses

The UK’s Competition and Markets Authority (CMA), which is conducting the probe, has put forward a series of proposed remedies that include breaking up the Big Four into audit and non-audit practices – something the firms have opposed.

The Australian competition regulator has fewer powers than the CMA, the AFR reported, citing an Melbourne-based audit academic.

The ACCC declined to comment to the paper, but PwC and KPMG both confirmed they were working with the regulator.

Share


Tags: