Investors unhappy with lack of competition in audit market

One of the UK’s largest investor groups said it is worried about the lack of
competition in the audit profession ahead of a Parliamentary investigation due
to begin later this month.

The Association Of British Insurers (ABI), whose members account for almost
15% of investments in the London stock market, is worried about the audit
structure and said it has made its views known in a submission to a House of
Lords inquiry into audit competition.

“We are genuinely concerned about the risks posed by the market structure of
four auditors which are ‘two big too fail’,” said Michael McKersie, assistant
director of capital markets at the ABI.

The comments come in a week when the city’s audit firms have been staking
their ground on the competition issue. Big Four audit firm Deloitte said the
audit market was “fiercely competitive and transparent”, in its submission to
the inquiruy while mid-tier firm Mazars said “People who believe the status quo
can continue are in the prehistoric age.”

Evidence is expected to be heard later this month.

Further Reading:

Audit
market is “fiercely competitive” Deloitte argue

Auditor-regulator
talks might benefit from code