Leading article: Scrutiny of the 'big four' is long overdue

 

Share
Related Topics

Imagine what your accountant would say if you said you'd been with the same supplier for donkey's years, you never shopped around and if you did, you would look only at three other firms – despite many others to choose from.

That, pretty much, is where we are with the auditors, where four firms – PwC, KPMG, Deloitte and Ernst & Young – have a stranglehold over the lucrative business of auditing the UK's largest companies. So total is their grip that only one member of the FTSE100 ranking has its books checked by a firm outside the "big four". Which is why the decision by the Office of Fair Trading to refer the profession to the Competition Commission is so welcome. It simply cannot be healthy commercial practice that a small number of firms enjoy such domination. Also ripe for inquiry is the startling fact that between 2002 and 2010 a mere 2.3 per cent of FTSE100 companies changed their auditor (presumably all those golf days and hospitality tickets represented money well spent). Ernst & Young said yesterday that it believed competition for audit work was "alive and well" – but how the accountants maintained a straight face as they peddled this line in the face of the 2.3 per cent figure is hard to fathom. But why stop at accountants? In law, the "magic circle" of Allen & Overy, Clifford Chance, Freshfields, Linklaters, and Slaughter and May occupy a similar lofty position. Big four, magic circle – the monikers speak volumes and invite long overdue scrutiny.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Head of Marketing and Communications - London - up to £80,000

£70000 - £80000 per annum: Ashdown Group: Group Head of Marketing and Communic...

Nursery Nurse

Negotiable: Randstad Education Manchester: Level 3 Nursery Nurse required for ...

Nursery Nurse

Negotiable: Randstad Education Manchester: L3 Nursery Nurses urgently required...

SEN Teaching Assistant

Negotiable: Randstad Education Manchester: We have a number of schools based S...

Day In a Page

 

Ed Miliband's conference speech must show Labour has a head as well as a heart

Patrick Diamond
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments