1542Finance and Accountancy Briefings

Finance and Accountancy Briefing

< back to search results

Competition Commission Market Investigation: Audit Services

Overview

In a summary of its provisional findings published today, the CC states that because companies find it difficult to compare alternatives with their existing auditor, prefer continuity and face significant costs in switching, they are reluctant to change auditor and so lack bargaining power. Audit firms outside the ‘Big 4', which dominate the market, find it difficult to show that they have sufficient experience and reputation to win the audit engagements of FTSE 350 companies.


Additionally, although auditors are appointed to protect the interests of shareholders, who are therefore the primary customers, too often auditors' focus is on meeting the needs of senior management who are key decision takers on whether to retain their services. This means that competition focuses on factors that are not aligned with shareholder demand.


Download to read the full report


 

Tags: Enterprise Act 2002, Big 4, FTSE 350, shareholders, Audit, Competition Commission.

Rating: 3 people found this useful

More from Competition Commission

Related categories