The OFT has provisionally decided to refer the audit market to the Competition Commission for a market investigation. A final decision will be taken following a six week consultation period, which ended on 9 September.
The Government has also published its response to the House of Lords Select Committee on Economic Affairs’ report on auditors and market concentration. Amongst other comments, the Government confirmed that it has been working with the FSA and the Bank of England on potential responses to one of the big four exiting the market. The Government’s view is that no firm is too big to fail, and it will consider issues around contingency planning. The Government is also not persuaded that there is a strong case for additional legislation on adequate and timely dialogue between bank auditors and supervisors.