UK: CC eases Big Four auditor crackdown plans

Taking a step back from its previous proposals, the UK’s Competition Commission announced Monday it will not pursue plans to require companies to switch auditors every five years, a measure intende to break-up the dominance of the so-called Big Four auditors that currently control the majority of the auditing market. The Commission has proposed, however, that it will require companies to at least put auditing contracts out for tender every five years. Further, the Commission said it will not pursue previously-suggested curbs on the types of auditing each company can provide. The Big Four, made up of KPMG, Deloitte, PricewaterhouseCoopers and Ernst & Young, largely control the accounting sector as companies will often stick with one of the four companies to service their accounting needs for more than a decade. The auditors have been largely scrutinized following their positive reviews of various banks just months before major government bailouts were needed to save the banks during the UK’s financial crisis in 2008 and 2009. But the giants have denied any negative effects on competition with their presence in the market and have downplayed any need for government regulation. The Commission’s chairman Laura Carstensen assured that the regulator’s findings did not support the measures once considered to break up the companies’ dominance; the case will now land in the hands of the European Commission, as reports say EU lawmakers have drafted legislation that would override the Commission’s rejection of requiring companies to rotate auditors after a fixed period of time.

Full Content: Reuters

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