Audit industry shake-up gathers momentum
The Competition and Markets Authority (CMA) has thrown its weight behind MPs who have called for a break-up of audit and consultancy services.
Earlier this month, the Business, Energy and Industrial Strategy Committee highlighted a conflict of interest between audit and consultancy services offered by the Big Four.
The CMA has added fuel to the flames by publishing its final report, containing four recommendations to address what it considers to be inadequate choice and competition.
Alongside splitting audit and non-audit services into separate businesses, it wants mandatory joint audits outside of the Big Four to review the UK's biggest companies.
It also wants new statutory regulatory powers to be introduced to increase accountability of companies' audit committees, and a five-year review to be conducted by the regulator.
Andrew Tyrie, chairman at the CMA, said:
"People's livelihoods, savings and pensions all depend on the auditors' job being done to a high standard, but too many fall short.
"More than a quarter of big company audits are considered sub-standard by the regulator. This cannot be allowed to continue.
"Conflicts of interest cannot be allowed to persist; nor can the UK afford to rely on only four firms to audit Britain's biggest companies any longer."
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