Business secretary Greg Clark has ordered the competition watchdog to carry out a sweeping review of the UK's audit sector.
In a year when the Big Four audit firms have been hit by numerous scandals, Clark has told Andrew Tyrie, head of the Competition and Markets Authority (CMA) to carry out the review into competition in the sector, potentially signalling that the industry could be about to face major reform.
"There are questions about the competitiveness of the audit market and there are questions about conflicts of interests," Clark told the Financial Times.
"It’s right to learn the lessons and apply them without delay."
Audit firms have faced criticism for their failings in the wake of the collapse of Carillion and BHS.
It has prompted speculation about a potential break-up of the Big Four firms – Deloitte, PwC, KPMG and EY.
Separately, Clark has also asked John Kingman, a former Treasury official and chairman of Legal & General to look into how potential conflicts of interest can be stamped out of the sector. This could include the establishment of a public body which appoints the auditors of large listed companies.
Kingman's review could be complete before Christmas, while Tyrie may make recommendations for reform in the sector without carrying out an extensive review.