The competition regulator has launched an immediate review of the audit sector, including the Big Four firms — PWC, Deloitte, EY and KPMG, following concerns over conflicts of interest.
The Competition and Markets Authority will look at whether the sector is ‘competitive and resilient enough to maintain high-quality standards’. It will report its initial findings before the end of the year.
The review comes amid growing concerns over the quality of audits, especially the failure of construction giant Carillion.
CMA Chairman Andrew Tyrie added if the “many critics of the audit process” were right, then “it is not just the companies which buy audits that lose out; it is the millions of people dependent on savings, pension funds and other investments in those companies whose audits may be defective”.