Audit market shake up

In a change to the original schedule, the Competition Commission (CC) will be making an announcement in July about the changes it recommends introducing in order to encourage greater competition in the audit services market, reports small business accountants Harris & Co.

The CC’s provisional findings, circulated in February, included a notice of possible remedies which shows the regulator was exploring a combination of options. These included mandatory tendering; mandatory rotation of firms; expanding the remit of the Audit Quality Review team and the external auditor; prohibiting ‘Big-4 only’ clauses; extending reporting requirements; and enhancing shareholder and auditor engagement.

Interested parties had until 18 March to comment on these proposals. The CC’s revised administrative timetable shows that the response hearings for its statutory audit services market inquiry will continue into May.

The regulator will then provide provisional information in July about the remedies it recommends to combat inequalities in the market, with the final deadline for all responses and submissions scheduled for August.

The CC says it will publish its final report on audit services in September, ahead of its statutory deadline of 20 October 2013.