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Reporting on audit

There are mixed stakeholder reactions to the audit market changes recommended by the Competition and Markets Authority.

When the Competition and Markets Authority (CMA) recently issued its final report on the UK audit industry it included radical recommendations (see CMA suggestions). The suggested changes include the separation of audit from consulting services, mandatory joint audit to enable firms outside the Big Four to develop the capacity to review the UK’s biggest companies, and the introduction of statutory regulatory powers to increase accountability of companies’ audit committees.

"Conflicts of interest cannot be allowed to persist; nor can the UK afford to rely on only four firms to audit Britain’s biggest companies any longer,” says Andrew Tyrie, CMA chairman. “Early action will require legislation – hence the CMA’s proposals. People’s livelihoods, savings and pensions all depend on the auditors’ job being done to a high standard. But too many fall short. This cannot be allowed to continue."