The last time the U.K.’s Competition and Markets Authority attempted to break up what is widely referred to as an oligopoly of the audit market by the Big Four audit firms—EY, PwC, Deloitte and KPMG—its actions had the opposite effect.
Auditor rotation and term limits introduced in 2014 forced an even greater concentration in the audit market, with 98 percent of the FTSE 350 now audited by the Big Four, compared to 95 percent prior to the change. Nevertheless, earlier this year, several parliamentary sub-committees tasked the CMA with deciding whether it needed to institute either a market study or a market investigation of the audit industry to try to increase options in the market.
