This year has seen the Competition and Markets Authority (CMA) recommend deeper scrutiny of the audit sector by the body that will replace the FRC – the Audit, Reporting and Governance Authority (ARGA).
The CMA also recommended that the Big Four split their audit businesses, and has proposed mandatory joint audits.
As he announced the findings, CMA chairman Andrew Tyrie said that the UK could no longer “afford to rely on only four firms to audit Britain’s companies”.
Today, the FRC reveals that the Big Four have increased their combined total fee income by 4.7% to £10.95bn. At non-Big Four public interest entity audit firms, total fee income fell by 8.1%.
A similar pattern in audit fee income – which rose for the Big Four by 1.7% but fell elsewhere by 6.3% – demonstrates the continued and increasing Big Four domination of the most lucrative contracts in the market.
There are fewer registered audit firms at work in the UK and Ireland than there were in 2017/18, down by 4.7%.