"Next tier" outline benefits from OFT audit inquiry
Firms below Big Four hope for wider, open competition for audit clients
THE TIER of firms that could most benefit from the OFT’s inquiry into audit market competition have outlined some of their wishes from the investigation.
Grant Thornton partner Steve Maslin (pictured) said there were a number of measures that could be taken that would open the market to reduce FTSE 350 audit concentration away from the Big Four.
“My view is that there are a number of steps that can be taken and that concerted efforts by the Competition Commission, the EC and investor groups will begin to reduce concentration in FTSE 350 audits over the next few years, creating a market based on the quality of audit provision rather than an arbitrary cut-off point that restricts access to the market to just four firms,” said Maslin.
James Roberts, senior audit partner at BDO, said the firm would “engage fully and constructively” with the OFT when it begins its discussions with stakeholders.
“We have long maintained that there is a lack of competition in this market but we are confident that there is a range of measures within the competition authorities’ powers which could do much to remedy the defective competition position that currently exists,” said Roberts.
PKF has called on the OFT to consider extending the scope of the competition discussions beyond just the biggest audit clients.
“Steps should be taken to promote competition below this level; the Big Four also audit about 80% of the FTSE small-capitalisation company audits,” said PKF senior partner Richard Bint.
He continued: “The capabilities of the five leading public company audit firms outside the Big Four, including PKF, need to be promoted and a level playing field introduced.”