D-Day for the Big Four: Competition Commission to smash the 'dominance' of KPMG, PricewaterhouseCoopers, Ernst & Young and Deloitte
The Competition Commission will look to smash the perceived dominance of the Big Four accountants this week when it publishes a hard-hitting list of reforms of the market.
KPMG, PricewaterhouseCoopers, Ernst & Young and Deloitte reacted angrily to the Commission's earlier findings that there were "systemic" issues that meant they ran the rule over the accounts of more than 95 per cent of FTSE 350 firms.
The inquiry, led by chairman Laura Carstensen, suggested a series of changes to help mid-tier accountants, such as BDO and Grant Thornton, break into a market worth more than £800m in fees. These included insisting that listed firms change auditor after a set number of years, known as mandatory rotation, and banning bank-imposed loan conditions insisting that a Big Four firm must be the auditor.
The Commission inquiry has since completed its consultation on these possible changes and will come up with a definitive list of reforms this week. Sources said that the majority will be adopted in the recommendations.
Mandatory rotation has been particularly controversial, with PwC arguing that it was "the shareholder's right to choose the best provider", which might be the auditor already in place.
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