DTI investigates Big Four dominance
A government-funded study into the implications of the collapse of one of the Big Four firms has begun as part of a wider look at competition in the audit market
The jointly commissioned research from the Department of Trade and Industry
and the Financial Reporting Council will examine the impact on competition of
the reduction of the Big Four to a Big Three, either through financial collapse
or litigation.
The contract to carry out the work has been awarded to economics consultants
Oxera, and will also look at the barriers to entry at the high end of the audit
market,as well as the appetite among the mid-tier firms to compete against the
Big Four for audit work.
Interviews are expected to begin shortly and it is expected to hit the desks
of the DTI and FRC next spring.
‘This is all part of our ongoing determination to have a top-quality
competitive market for audit services,and to ensure that there is transparency
and accountability,’ said a DTI spokeswoman.
Meanwhile,the DTI hosted a large stakeholder meeting last week to discuss
differences of opinion over the latest draft of the company law reform bill.
While auditor liability was on the agenda,it is understood that a very wide
range of topics were under discussion.