PracticeAuditNumber of audit firms in market drops by 25%

Number of audit firms in market drops by 25%

Professional Oversight Board report shows 25% reduction in number of registered audit firms, but growth rate of total fee income continues to increase

The regulator’s annual report of trends in the profession has shown a
reduction in the number of registered audit firms between 2001 and 2006 by more
than 25%.

The Professional Oversight Board, which released its report today, suggests
that the reduction is likely to be the result of increases in audit thresholds
in the UK and the corresponding decrease in the number of firms requiring audit
registration, as well as mergers between audit firms.

The report also shows that the growth rate of total fee income for the firms
has increased between 2004 and 2006, with audit fees particularly increasing
during this period as a result of work on IFRS and ISAs.

Audits of large listed companies continue to be dominated by the Big Four,
with 99% of FTSE 100 and 97% of FTSE 250 companies opting for Big Four auditors.

However, only 28% of companies listed on AIM are audited by a Big Four firm.

Click
here
to read the report.

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