PracticeAuditOFT to decide on audit inquiry

OFT to decide on audit inquiry

Response considered to calls for investigation into Big Four audit market dominance

THE OFFICE of Fair Trading will decide this month whether to investigate Big Four dominance in the audit market, a spokesman has revealed.

The board is meeting today and audit is “on the agenda”, but a decision “is not imminent”, with the OFT saying only that “an announcement will be made in May”.

Asked by both George Osborne and the House of Lords to look into the matter, the OFT is under pressure to acquiesce and experts think it unlikely they will decline.

Osborne used the Budget to instruct the anti-trust body to examine banking covenants, the anti-competitive clauses by which lenders force clients to use a Big Four firm.

The House of Lords investigation into audit went further, calling for a far-reaching review of concentration and choice in the market. The committee even suggested that the Competition Commission might need to be called upon, a more serious indictment that could result in the forced break up of the largest firms.

It is up to the OFT to decid if it will take up the call to arms and at what depth to investigate.

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