The Competition enquiry into the audit business has been triggered by the Office of Fair Trading which found that four accountancy firms -- PriceWaterhouse Coopers, KPMG, Ernst and Young and Deloittes -- dominated this £600m industry with little switching going on and limited opportunity for smaller players.
One firm, PriceWaterhouse Coopers or PWC has a 47% share of companies in the FTSE 100 stockmarket index. And, on average, FTSE companies, the biggest names in British business, will change their auditor only once every 43 years.
The costs involved in switching can be prohibitive, estimated to be as much as £1m a time for a large company.
Possible measures to re-ignite competition could include forcing auditors to shares contracts, limiting an individual firm's market share and designing a standard way to hand over information when an employer switches auditors.