CMA thinks major overhaul is needed for 'Big Four' accountancy firms

The UK’s Competition and Markets Authority (CMA) has recommended a huge change-up of the country’s accountancy market.

However, when it came to the Big Four, the CMA fell silent. It suggested auditing and consultancy services should be kept separate entirely.

This news follows on from the collapse of companies like Carillion, audited by KPMG.

CMA chairman, Andrew Tyrie, commented on the statement: “People’s livelihoods, savings and pensions all depend on the auditors’ job being done to a high standard.

“But too many fall short - more than a quarter of big company audits are considered sub-standard by the regulator. This cannot be allowed to continue.”

Earlier this month, MPs called for the Big Four accountancy firms to separate.

Rachel Reeves, chair of the Commons Business, Energy and Industrial Strategy Committee, added: “We welcome the CMA’s recommendations aimed at addressing what are failings in the audit market and ending the stranglehold of the Big Four.

“We agree that it is high time that their audit work is separated out from their consultancy services to tackle the conflicts of interest that have persisted for too long.”

One of the Big Four, PwC concluded that it is “important that the potential impact and implementation of recommendations are well thought through to ensure they deliver the desired outcomes and avoid any unintended consequences.”