Big Four audit dominance under threat

A new joint report by the government and the independent accounting
regulator, the Financial Reporting Council, could see the Big Four’s monopoly of
blue chip audit market loosen.

The study, to be published this week, examines the dominance of the top four
firms – PricewaterhouseCooopers, KPMG, Ernst & Young and Deloitte – and its
implications for the quality and efficiency of audits.

Smaller accounting firms have been all but shut out of the top end of
the audit market, but are eager to break in.

The report could see a major shake-up in the provision of audit work to top
plcs, the biggest since the demise of Andersen following the Enron scandal in
2002, when Andersen formed part of a dominant ‘Big Five’ top tier of firms, the
FT reported.

The Big Four audit all but one of the UK’s 100 biggest companies and 98% of
the FTSE 350.

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