Competition and choice in the UK audit market

Competition and choice in the UK audit market Prepared for Department of Trade and Industry and Financial Reporting Council April 2006Oxera i Draft for Comment: Strictly Confidential Oxera Consulting Ltd is registered in England No. 2589629. Registered office at Park Central, 40/41 Park End Street, Oxford OX1 1JD, UK. Although every effort has been made to ensure the accuracy of the material and the integrity of the analysis presented herein, the Company accepts no liability for any actions taken on the basis of its contents. Oxera Consulting Ltd is not licensed in the conduct of investment business as defined in the Financial Services and Markets Act 2000. Anyone considering a specific investment should consult their own broker or other investment adviser. The Company accepts no liability for any specific investment decision, which must be at the investor’s own risk. © Oxera, 2006. All rights reserved. Except for the quotation of short passages for the purposes of criticism or review, no part may be used or reproduced without permission. Executive summary Key findings of this report – The Big Four audit firms—Deloitte & Touche, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC)—audit all but one of the FTSE 100 companies, and represent 99% of audit fees in the FTSE 350. The high degree of concentration in the market became more marked after the Price Waterhouse/Coopers & Lybrand merger in 1998 (six-to-five) and the dissolution of ...