EU waiting on outcome of Competition Commission probe

THE OUTCOME of a UK inquiry into competition in the audit market could have serious ramifications for planned EU reforms to the industry.

With the Competition Commission due to reveal the findings of its probe into the UK audit market in October, lawmakers on the continent are deferring approval of internal markets commissioner Michel Barnier’s proposed reform of the audit market until the autumn, Reuters reports.

“The initial views presented by the Competition Commission will be one of a number of factors considered when designing the future of the audit market in the EU,” said Sajjad Karim, the British Conservative lawmaker responsible for the law in the European Parliament.

Industry opinion is split as to what medicine the Competition Commission will prescribe for the audit market when it pronounces its judgement later this year, although most expect it to identify some form of issue.

However, if the inquiry came out in favour of the Big Four’s oligopoly, it could prove very damaging for the EU proposals.

“If the Competition Commission came out with a view that it can’t see an issue with market concentration then that would be extremely unhelpful for the European dynamic for change,” David Herbinet, a partner at Mazars, told Reuters.

There is already too much momentum for EU change to be stopped completely by any “negative” UK outcome, Herbinet added.