The House of Lords began its inquiry examining the audit industry during the fi nancial crisis and the concentration of the audit market in the UK on 12 October 2010. The committee is chaired by Lord MacGregor.
The Financial Reporting Council wants greater power to sanction and discipline audit fi rms, including the introduction of additional licence requirements for auditors of large companies.
Submissions from the profession itself include calls for:
- Dual audits, which some consider will encourage new players to come into the audit market by offering visibility, and facilitate change in auditors by removing the risk of appointing a totally new auditor
- A code of conduct to improve communication between auditors and regulators
- A cap on the number of clients large accountancy fi rms can audit to reduce the dominance of the Big Four and improve competition
- Audits for small businesses and company subsidiaries to be scrapped, and regulators to encourage investors and nonexecutives to consider hiring auditors outside of the Big Four.
The inquiry is continuing.