The FRC has published its Fourth Progress Report on the implementation of the MPG recommendations on promoting choice in the UK audit market. In October 2007, the MPG published 15 recommendations intended to allow the audit market to work
more efficiently and, in the medium‐to‐long‐term, to have a positive impact on audit choice in the UK.
The report notes changes in market concentration from 2006 to August 2009. Since that date the market has see a slight increase in the number of FTSE 350 companies with non‐Big Four auditors, although looking at the latest figures compared with those in February 2009, it is possible that this trend may now have stalled. Subsequent to August 2009, the FRC is aware of at least one FTSE 350 company which has changed from a non‐Big Four auditor to a Big Four firm. Non‐Big Four firms remain strong in AIM and to a lesser extent in the FTSE Small Cap and Fledgling indices.
Paul Boyle, Chief Executive of the FRC, said:
“The FRC remains concerned about the significant uncertainty and cost which could arise in the event that one or more of the Big Four audit firms left the market. Regardless of the actions taken by market participants, this risk is likely to remain significant in the medium to long term. It remains to be seen whether market-led actions will prove to be sufficient to reduce this risk to an acceptable level.”