OFT refers audit market to Competition Commission

The decision follows a public consultation which closed in September. The OFT says it has been concerned for some time that the audit market is highly concentrated, with low levels of switching and substantial barriers to entry.

In 2010, the Big Four earned 99% of audit fees paid by FTSE 100 companies. Between 2002 and 2010, the average annual switching rate among those companies was only 2.3%.

The OFT also believes a Competition Commission inquiry has the potential to address UK-specific competition concerns that may not be within the scope of the EU’s work.