MID-TIER FIRMS have given evidence to the Competition Commission, calling for the stranglehold of the Big Four in the audit market to be broken.
Last year, the Competition Commission began an enquiry into the Big Four’s dominance of the audit market – following a referral from the Office of Fair Trading’s initial investigation.
Grant Thornton said that the major firms had built up cosy relationships with big companies relying on brand strength, with some bankers even requiring a particular auditor’s appointment.
The European Commission plans to finalise reforms of audit rules later this year or early next year. The latest draft audit proposals from the Commission encourage companies to use non-Big Four firms, through using mandatory rotation periods and joint audits.
Jonathan Faull, director-general for internal market and services division of the Commission, answered questions about the proposed reforms at a parliamentary economic affairs committee earlier this month.
He reiterated that mandatory rotations of six years would be enforced across Europe, although companies that opted for joint-audits could change firms after nine years.
Currently just one FTSE 100 companies’ audit is handled by a non-Big Four firm – BDO.
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned