The Competition Commission has delivered its verdict on allegations that the Big Four firms colluded over the company audit market to keep competition out and prices high.

The initial findings into the investigation of tacit Big Four collaboration to manipulate the FTSE 350 company audit market showed that there was not enough evidence to support claims from rivals to the contrary.

This was despite the fact that between 2002 and 2010, the Big Four firms audited over 90% of FTSE 350 companies, representing more than 95% of the total value of FTSE 350 audit fees.

But in a paper detailing the findings, the watchdog said: 'We consider that certain features in the supply of audit services to FTSE 350 companies appear to be conducive to tacit co-ordination based on the identity of clients.

'However. whilst many of the market conditions conducive to tacit collusion in relation to market share appear to be satisfied, we do not currently have the further evidence necessary to establish that there has been tacit coordination. This position would change if, as a result of further work on other work streams, we were to identify information that could be evidence of tacit coordination (or of any mechanisms in place to enhance the possibility of coordination).'

In their defence, the Big Four said they lacked 'the incentive or ability to tacitly coordinate their behaviour' for reasons ranging from 'the number of firms in international networks that would need to be party to such behaviour'; the number and complexity of factors that would determine the audit firms' decisions in relation to the sectors in which they operated and uncertainty about when audits would come up for tender.

Deloitte told the commission that the findings wrongly suggested that the market was relatively stable as its share of the FTSE 100 audit market had grown from five to 22 appointments over the last 15 years. It added that the scope of its audit services also changed to mirror the evolving needs of clients' businesses.

In its submissions to the CC, mid-tier firm BDO urged the watchdog to compare audit pricing following tenders in which only the Big Four firms participated, and compare them to tenders in which BDO and other non-Big Four firms also participated.

It also asked the body to compare audit prices over time following a competitive tender, as research had found that the Big Four hiked prices within three years of winning a competitive tender, and to consider whether this was indicative of tacit coordination.

The CC said its view on tacit collusion could be revised if the ongoing investigation into the audit market discovered new evidence.