In an investigation into the dominance of PwC, Deloitte, KPMG and Ernst & Young in the audit market, the Competition Commission has concluded that their ‘vast alumni networks’ could be quashing competition.
99% of audit fees paid by FTSE 100 companies in 2010 were received by one of ‘The Big Four’.
The watchdog fears that having past experience of working for one of these firms could influence selection of auditors, finding that 60% of UK audit committee chairs and 66% of CFOs have worked for one of the four companies.
However, PwC global chairman, Dennis Nally, has questioned the idea that senior business figures might lean towards the Big Four simply because they had once worked there for a few years. He described PwC as a ‘tremendous training ground for financial executives’, but added ‘If they remember their years at PwC I can’t imagine that will influence how they think about auditor selection.’
Read the full story on the Financial Times website.
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