Start date: September 2010
End date: 21 October 2011
The OFT has been concerned for some time that the market for statutory audit services to large companies in the UK is highly concentrated, with substantial barriers to entry and switching. The OFT set out its concerns in a submission to the House of Lords Select Committee on Economic Affairs in September 2010.
On 17 May 2011, the OFT announced that it had provisionally decided that the competition issues that it had identified in the audit market passed the statutory test for referral to the Competition Commission (CC), but that it wanted to discuss with interested bodies whether potential remedies would be available before reaching a decision on whether to exercise its discretion to refer.
The OFT held a series of roundtable and bilateral meetings during June 2011 where we considered potential remedies in this market and whether or not a reference would be appropriate. Participants included audit firms, investor organisations, shareholder groups, professional bodies, regulators, Government bodies and academics.
On 29 July 2011, the OFT announced that it had reached a provisional decision to refer the audit market to the CC, and opened a public consultation. This consultation ran for six weeks and closed on 9 September 2011.
Following these processes, the OFT is satisfied that there is a reasonable chance that appropriate remedies will be available to the CC in the event that it finds one or more adverse effects on competition. Accordingly, the OFT has decided to refer the market for statutory audit services to large companies in the UK to the CC for detailed investigation.
The OFT's market investigation reference was announced on 21 October 2011. Further details on this reference can be found on the Market Investigation Reference page.
In September 2010, the OFT made a submission (pdf 191kb) to the House of Lords Select Committee on Economic Affairs in relation to its inquiry into Auditors: market concentration and their role. The OFT made an additional submission (pdf 50kb) to the Committee in March 2011.
Since 2002, the OFT has been keeping the accountancy and audit market under review. See press release OFT to keep accountancy and audit market under review (22 November 2002) and statement (pdf 59kb) of November 2002 for further details.
Team Leader: Peter Hill (0207 211 8806, firstname.lastname@example.org)
Project Director: Ed Smith (0207 211 8434, email@example.com)
Senior Responsible Officer: Clive Maxwell (0207 211 8950, firstname.lastname@example.org)
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