On 9 October 2018, the Competition and Markets Authority (CMA) launched a market study into the statutory audit market.
The study will explore the following main themes:
- Choice and switching — despite changes introduced by the Competition Commission to strengthen the competition between the Big Four, the largest U.K. companies still turn almost exclusively to one of them when making their choice of auditor.
- Resilience — commentators have raised concerns around whether each of the Big Four is 'too big to fail,' potentially threatening long-term competition if any of the Big Four were to exit the audit market.
- Incentives — as companies choose their own auditors, the market study will explore what incentive issues are raised. In particular, it will consider the range of incentives for all stakeholders in the market, and how this affects competition.
The CMA notes that these themes are essential in achieving its overall objective of ensuring delivery of highquality audits, at competitive prices.
The CMA press release can be accessed here
The market study notice can be accessed here.
The invitation to comment can be accessed here.
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