The Big Four accounting firms will face greater competition in the United Kingdom as FTSE 350 companies will be required to put their statutory audit engagement out to tender every 10 years, according to a ruling by the U.K. Competition Commission.
The commission’s ruling, issued last month, is designed to increase competition, improve bargaining power of companies, boost the influence of audit committees, and ensure audits better serve shareholders. Large companies would be prohibited from pre-restricting auditor choices to the Big Four – KPMG, PwC, Ernst & Young, and Deloitte – but companies can require any auditor to meet “objective criteria” during the selection process. Incumbents would be allowed to participate in re-tenders.
