… as European Commission investigates

The global merger of Ernst & Young and KPMG is expected to come under investigation by the regulators in the next month.

In response to the Research International survey, Alan Reid, chairman of KPMG Management Consulting International, said that it would be wrong to say that competition would be dramatically reduced on the audit or the consultancy side. When the firms merge, they will have 7 per cent of the market, while Andersen has 21 per cent, Reid said.

“In the UK only 35 per cent of consulting is in the hands of the Big Six, the rest is in the hands of other consulting firms, and that does not seem like a monopoly situation,” said Reid. “In no way is this survey valid from a consultancy perspective. Clients are demanding worldwide consulting services, and it is very important that those firms should have consulting advice on a worldwide basis.”

Andrew Jones, UK managing partner at Ernst & Young at said press commentary was feeding fear of change.

“We have obviously been required by the European Commission to talk to a number of clients and when they are focused on strategy, clients see a need for doing merging rather differently,” said Jones. “The EC has talked to a number of clients and there is a reasonable balance for and against. It is there to judge whether four big firms are enough for competition.

It is unrealistic to expect the vast majority to support the merger, they are more interested in whether they are getting continuity of service.’

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