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The logos of Price Waterhouse Coopers, Deloitte, KPMG, and Ernst & Young can be seen in a collage of file photos. Photo courtesy of REUTERS/File Photo (Reuters) – LONDON, July 14 (Reuters) – Last year, the Big Four accounting firms dominated audits of Britain’s largest listed businesses and received higher fees, according to the industry’s regulator, as long-awaited reforms to promote competition are put into action. KPMG, EY, PwC, and Deloitte audited all FTSE 100 businesses in a roughly even four-way split, according to the Financial Reporting Council (FRC), which governs auditors. Following the failure of retailers BHS and Carillion as a result of Big Four audits, government-backed assessments advocated a shake-up of the industry. Last year, the Big Four audited more than 200 FTSE 250 companies, a group in which smaller auditors grew their stake from 4.8 percent to 7.6 percent. Despite the difficult economic climate, the Big Four increased average audit fees by 7.7%, while their competitors increased prices by 4.7 percent, maintaining a trend of fee rises since the FRC began collecting data in 2004. The industry evaluations also advocated replacing the FRC with a new, tougher regulator, the Audit, Reporting and Governance Authority, to encourage change (ARGA). The administration, on the other hand, has yet to introduce legislation to carry out the suggestions. In a statement, FRC CEO Jon Thompson said, “Improving competition across the audit market and ensuring audit firms focus, above all else, on delivering high-quality audit is essential to improving trust in audit and corporate governance and remains a key priority for the FRC as it transitions to become ARGA.” To gain expertise with blue chip clients, the government has proposed that a challenger business split an audit with one of the Big Four firms. Companies, on the other hand, are opposing the plan, with calls to impose market share limitations on the Big Four instead. Huw Jones contributed reporting, and John Stonestreet edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More

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