The Institute of Chartered Accountants of Scotland has urged that the regulator come up with contingency plans which can be effected in the event of the failure of a Big Four firm.

The recommendation is among the main points made by the institute in its response to the Market Participants Group's interim report.

ICAS said it supported the FRC and acknowledges that several publicly listed companies have made efforts to set contingency plans in place.

But it said the question that remained was whether a collapse could be sustained by corporate effort alone.

David Wood, Executive Director, Technical Policy said that if the Big Four became the Big Three, we would be looking at a huge amount of audit work to be soaked up by other firms.

'The corporate sector will tackle the risks on a company by company basis, but the FRC should have a role to play as well. A framework should be created in which audit expertise and public entity audits can be transferred smoothly to other market participants in the case of a major firm withdrawal,' he said.

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