PracticeAuditOFT audit inquiry decision due

OFT audit inquiry decision due

OFT to decide on referring audit market to Competition Commission, potentially resulting in two-year inquiry

THE OFFICE of Fair Trading will today announce if the Competition Commission should investigate the audit market, having decided that there are “substantial barriers to entry and switching”.

For several months, the watchdog has been collecting evidence and liaising with stakeholders, saying that these anti-competitive elements could warrant investigation by the more powerful body.

However, the OFT warned that the Big Four’s global reach might render the UK-based solutions available to the Competition Commission flat, meaning that a referral would be pointless.

Big Four spokespeople said there is no inkling as yet of the detail contained within the report, which is expected later this morning.

If the Competition Commission takes up the case, it will conduct a forensic examination of the market and suggest potential remedies. These could include the break-up of the Big Four or forced divestment of their assets, both of which are within the commission’s power to enforce.

If the OFT decides against referral, it could ask the Big Four to voluntarily put in place mechanisms to deal anti-competitive elements. Critics say this solution lacks teeth but the firms insist that more stringent regulations would stifle growth and “fairer” market forces.

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