The Big Four accountants have launched fierce defences of the reasons for their market dominance in auditing major companies.
In their latest submissions to a Competition Commission probe, PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young are fighting claims at both a domestic and European level that they have an unfair stranglehold on the market. Mid-tier firms, such as BDO and Grant Thornton, have grown increasingly excited that the UK inquiry, chaired by former City lawyer Laura Carstensen, is finding evidence which confirms their arguments that the market needs to be opened up.
However, in submissions discreetly published on the Competition Commission website on Friday, Deloitte took umbrage at the suggestion that because so many FTSE 350 finance directors and audit committee chairmen were Big Four alumni, they automatically pick former employers to do their accounts.
The Deloitte paper said: "We completely disagree with these allegations which seem to us to be a direct criticism of the integrity of some of the UK's leading businesspeople."
The Big Four particularly dominate the FTSE 100 client list. Between 2001 and 2011, every client in the top index to switch auditor did so among the largest accountants.
PwC said mid-tier firms simply do not match the capabilities of the Big Four when it comes to auditing groups which have hundreds of subsidiaries. It added: "The hurdle faced by the mid-tier firms is the fact that they do not possess the attributes needed to conduct an audit of the relevant companies."
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