COMPETITION PROBLEMS in the audit market have seen the Office of Fair Trading decide that referral could be made to the Competition Commission.
After considering evidence, the OFT said that there were reasonable grounds for suspicion that features of the market “restrict, distort or prevent competition in the UK”.
Clive Maxwell, OFT executive director, said: “As we told the House of Lords Economic Affairs Committee, we have been concerned for some time about the extent of competition in this market, with only four large players and substantial barriers to entry and switching.”
However, the OFT will work with the audit profession and stakeholders to decide how the situation can be resolved, either with or without the Competition Commission’s involvement.
A key issue will be whether remedies will be open to the Competition Commission, and assess whether action needs to be taken at either national or international level.
“We believe that the statutory test for a Competition Commission reference has been met, but are keen to understand more about the remedies available in the market and, consequently, whether or not a reference to the Competition Commission would be an appropriate response to our concerns.”
Further details on how the OFT reached its decision will be published alongside its consultation on why it will, or will not, make a reference to tha Competition Commission.
The FRC has said that the investigation will 'consider, but not be restricted to, issues regarding misstated accounting balances'
Craig Maxwell joins the audit and assurance team in Scotland
Stephen Grayson to join the audit department in Manchester
Promotions have been made in the private clients tax team and corporate business team