The Competition Commission has
published the initial findings of its 18-month investigation into
the audit market
The Competition Commission's (CC's) provisional report into
the FTSE 350 audit market says restrictions on competition are making
it hard for companies to switch auditors. It also says auditors are
failing to serve shareholders because of a focus on management needs.
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 Four find it difficult to show that
they have sufficient experience and reputation to win the audit engagements
of FTSE 350 companies.
