PwC, Deloitte, EY, KPMG, BDO and Grant Thornton met with the Institute last month following a challenge by the Competition and Markets Authority (CMA) that they get together and come up with ideas to improve competitiveness in the audit market, according to the Times.
ICAEW regularly holds meetings with the big firms to discuss and address several issues, including competition.
It follows a Department for Business, Energy & Industrial Strategy and Work and Pensions committees a report in May that said the UK’s audit market was a “cosy club incapable of providing the degree of independent challenge needed”, and recommended that the government refer the statutory audit market to the CMA.
Earlier this year, the Financial Reporting Council (FRC) called for an inquiry into the case for breaking the Big Four firms into separate parts following the Carillion scandal.
The Big Four firms currently audit 341 of the 350 largest companies in the UK.
Hywel Ball, EY’s UK head of audit, said, “The CMA has challenged the profession to suggest some solutions to increase choice in the market. We are working with the ICAEW and the rest of the profession to respond to that challenge.”
A CMA spokesperson said, “We are working closely with the [FRC], whose role it is to regulate the quality of UK company audits, to see what more needs to be done to drive up standards. As part of this, we are actively monitoring the impact of the remedies put in place following the Competition Commission’s inquiry.
“The CMA remains open to looking further at the audit sector itself and will work with the FRC in support of any action it chooses to take.”
KPMG and PwC declined to comment.