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Technical updates May 2013

Our round-up of legal and regulatory changes.

The Competition Commission (CC) has published its provisional findings on its market investigation into the supply of statutory audit services to large companies in the UK. It has found that competition in the audit market is restricted by factors which inhibit companies from switching auditors and by the tendency for auditors to focus on satisfying management rather than shareholder needs.

In a summary of its provisional findings, the CC states that because companies find it difficult to compare alternatives with their existing auditor, prefer continuity and face significant costs in switching, they are reluctant to change auditor and so lack bargaining power. Audit firms outside the Big Four, which dominate the market, find it difficult to show that they have sufficient experience and reputation to win the audit engagements of FTSE 350 companies.