‘Big Four’ audit firms face competition probe

The UK competition watchdog is to investigate the audit sector following concerns over conflicts of interest.

It will look at whether the sector is “competitive and resilient enough to maintain high quality standards”, the Competition and Markets Authority said.

The decision follows concerns the sector “is not working well for the economy or investors”, the CMA said.

The dominance of the ‘Big four’ accountancy firms Deloitte, EY, KPMG and PwC is expected to be scrutinised.

The move comes amid growing concerns about the quality of audits, in particular following the collapse of construction firm Carillion.

“If the many critics of the audit process are right, it is not just the companies which buy audits that lose out; it is the millions of people dependent on savings, pension funds and other investments in those companies whose audits may be defective,” said the CMA’s new chairman Andrew Tyrie.