Alliance advises FRC on ownership rules

News Article - 25 April 2007
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Old rules limiting the ownership of accountancy practices to qualified accountants may be set to change as an organisation challenges the dominance of the big four firms.

The Financial Reporting Council (FRC) said earlier this week that it had formed an alliance of support for looking at how the big four firms' grip could be loosened through outside capital.

Market choice could be broadened through creating audit start-ups or the expansion of medium-sized firms, the alliance - entitled the Market Participants Group - decided.

In a report issued by the group yesterday, members stated that it was necessary to improve the choice from within the big four companies and reduce the risk of one of the firms leaving the market without valid reasons.

FRC chief executive and convenor of the MPG, Paul, said: "The Market Participants Group has brought together senior representatives of the corporate community, audit firms and investors.

"It is important now that a wide range of organisations read the report and respond to the consultation."

The group stated that audit firm ownership rules could limit changes to future investment by new or existing companies and called for greater understanding of the effects of changes to such rules.

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