Big Six - Firms answer EC questionnaire on mergers

More than 100 UK accountancy firms and their clients are being quizzed on the Big Six mega-mergers by the European Commission.

As the commission's inquiry enters the second stage, firms of all sizes, from the Big Six, through Group A to small partnerships, are being asked to complete questionnaires relating to their sector of the market, according to Nick Land, Ernst & Young's senior partner. Some E&Y clients, including multinational companies, are being asked for details.

The commission hopes the survey will establish the size of the audit market, and the extent that the planned merged firms' cut-price audit services would exclude competitors.

Colin Stanbrook QC, who heads KPMG and E&Y's commission presentations, said it was 'standard practice' for the commission to carry out 'information-gathering' missions. But he noted it was unusual for the commission to investigate the possibility of price-cuts rather than price-hikes.

Colin Sharman, KPMG's international chairman, said the commission was also taking the rare step of discussing the mergers with other global competition authorities. He said: 'From what Karel van Miert was saying at Davos last week, it sounds as if the different authorities will get together on this.'

Both Stanbrook and Sharman felt the whole process would give the commission new insights into international accountancy issues, and that a discussion of pan-European regulation, and the varying audit rules across the continent, would inevitably follow.

Coopers & Lybrand's Chilean firm Langton Clarke has defected to Arthur Andersen. Langton's 25 partners are understood to be dissatisfied with the planned merger with Price Waterhouse.