Fees rise as Big Four still dominate FTSE 100 audits market

Long-standing plans to increase competition in the auditing market appear to have been delayed slightly longer, as the Big Four accounting firms continue to dominate.

The Financial Reporting Council (FRC), the regulator for auditors, said that KPMG, EY, Deloitte and PwC audited all FTSE 100 companies in a roughly even four-way split.

Government-backed reviews had recommended a shake-up after the collapses of BHS and Carrillion following Big Four audits.

Smaller firms have seen their share of audits of the companies in the FTSE 250 increase from 4.8 per cent to 7.6 per cent.

The trend of increased fees continued despite tough economic conditions brought on by the pandemic. The Big Four saw their fees increase by an average of 7.7 per cent.

The reviews backed the replacing of the FRC with a new, stronger body that could bring through change more swiftly. However, the government has not yet brought through the required legislation to enact such changes.

FRC CEO, Jon Thompson, said: “Improving competition across the audit market and ensuring audit firms focus, above all else, on delivering high-quality audit is essential to improving trust in audit and corporate governance and remains a key priority for the FRC as it transitions to becoming ARGA.”