Competition inquiry into Big Four

The big four accountancy firms are facing their own audit after the Office of Fair Trading (OFT) recommended a full-blown competition inquiry into the industry.

Deloitte, KPMG, Ernst & Young and PricewaterhouseCoopers, which check the books of nearly all of the UK's largest companies, were criticised last year by a House of Lords committee over conflicts of interest and the quality of published accounts.

The Lords said auditors' failure to communicate with regulators ahead of the banking crash amounted to a "dereliction of duty".

The OFT said it had been concerned for some time that this market was highly concentrated, with substantial barriers to entry and switching. A final decision on a referral will now be taken after a six-week consultation.