Investment management companies have called on the competition watchdog to ensure that the quality of audit is not affected as it is investigating the dominance of the so-called Big Four firms.
In the response that was published last Saturday, it stated: “The greater risk is that the scale of auditing becomes too small to warrant it continuing as a service with the conglomeration of services provided by the Big 4 and there is a market withdrawal.”.
The competition watchdog is reviewing whether the audit market is fit for the purpose after a number of failures that were experienced in the sector.
Both Carillion and BHS were given a clean financial bill of health by KPMG and PwC respectively prior to their high-profile collapses.
Various investment companies were concerned that smaller firms were ill-equipped to audit the finances of large multinational businesses.