FRC group to advise on ‘audit choice’

The Financial Reporting Council has approved an advisory group, which will
‘identify and assess possible actions’ which auditors can take to counteract the
perceived risk of limited choice in the provision of audit services to public
interest entities.

The group has been established following the government-commissioned Oxera
report, published in April, which highlighted the fact that the Big Four audit
97% of FTSE 350 companies, and that many large plcs can only choose between two
or three such firms.

Known as the Market Participants Group (MPG), it comprised of four
representatives from the entities being audited, four from firms providing audit
services, and four from shareholders and other users of audit services.

Members are appointed as individuals, based on their knowledge of the
preparation or use of audit reports and the auditor selection process and on
their seniority.

FRC chief executive, Paul Boyle said the group had a ‘good balance of
membership between the corporate community, audit firms and investors and other

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