Market forces 'could break up Big Four'

News Article - 25 September 2006
Category: Business

Market forces may be enough to break the Big Four's dominance of the accountancy sector, according to the Institute of Chartered Accountants of Scotland (ICAS).

The group suggested that plans to artificially break up their stranglehold on the market should be halted, as the lack of competition could be their undoing.

ICAS suggested that if one of the Big Four firms went under, such as in the event of a major lawsuit, the others would be unable to shoulder the burden created by its absence.

Norman Murray, president of ICAS, told the Herald: "We should trust market forces to mould demand for audit services and already, since the Oxera report was published, we can see significant moves being made."

The Oxera report stated that the Big Four audited 97% of FTSE-350 companies, while they audited all but one of the FTSE 100 Index, which limited choice and competition.

Some analysts have already warned that the accountancy profession could possibly collapse in the event of one of the Big Four going into liquidation, due to the lack of similarly-sized companies to take their place.

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