Britain’s top 350 companies must put their audit work out to tender every ten years, the Competition Commission has ruled.
After an on-going review into the dominance of the Big Four in the UK audit market, the Competition Commission has published its final report. Requiring companies to allow accountancy firms to bid for their audit work regularly will help to promote healthy competition, the commission says. Companies will also no longer be allowed to limit those bidding for their contracts to only the Big Four.
The rulings stop short of initial draft recommendations requiring companies to re-tender their audit work every five years. The watchdog also shunned the tougher route of actually forcing companies to change auditors, although it has confirmed that the FRC should review the audit contract of the 350 companies every five years.
The reforms will come into force towards the end of 2014.
Chair of the Competition Commission’s probe Laura Carstensen said: ‘Our measures will deliver lasting change in a market where currently a major company putting its audit out to tender remains unusual enough to be a news story.’