Despite the acquisition of Andersen assets by Deloitte & Touche getting the go-ahead from the European Commission last week, the UK regulator stressed it would investigate concerns.
One area of potential worry could centre on the impact of the deal on large quoted companies which favour the big prestige firms to audit their accounts. The statement holds out the possibility that the OFT could rule the existence of only four big firms auditing most listed companies as uncompetitive.
An OFT spokeswoman said it would continue to monitor the profession, adding: ‘We are always able to look at competition issues. We do not believe there are problems with this specific merger. But if any wider competition issues do arise we are able to look at the activities of companies in the accountancy market.’
The European Commission cleared the acquisition of assets by Deloitte & Touche, having closely examined the merger’s impact, and concluded that the disappearance of Andersen UK was inevitable in view of the serious problems facing the firm in the US.
The OFT and the EC also examined the extent of concerns about the reduction of the big auditing firms as was the case in 1998, following the merger of Price Waterhouse and Coopers & Lybrand. It revealed a number of UK customers said the acquisition was preferable to the disorderly disappearance of the UK Andersen partnership.
But Financial Services Authority chair Sir Howard Davies recently said the reduced number of big firms was ‘most unfortunate’, while the Treasury said ministers could refer the matter to competition investigators.
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