UK challenger firms have increased their share of FTSE 250 audits, up from 4.8% to 7.6%, according to data from the UK’s Financial Reporting Council (FRC).
While these firms made gains in the FTSE 250 market, all FTSE 100 companies continue to be audit by a Big Four firm.
In the FRC’s latest Key Facts and Trends in the Accountancy Profession, the FRC noted that improving competition across the FTSE 350 audit remarket remains a key focus for the regulator.
The report found that that the five largest challenger firms outside the Big Four audited 19 FTSE 350 companies, up from 10 the previous year.
The Big Four firms increased their average audit fee income per Responsible Individual (RI) by 7.7%. Those firms outside the Big Four, with PIE clients, also increased their average audit fee income per RI by 4.7%. There has been a continual increase in the average audit fee income per RI for all firms since 2004 when the FRC began its data collection for this publication.
FRC CEO Jon Thompson said: “It is encouraging that the challenger firms have increased their share of the FTSE 350 audit market, albeit from a low base, however it is clear the Big Four continue to dominate the FTSE audit market.
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“Improving competition across the audit market and ensuring audit firms focus, above all else, on delivering high-quality audit is essential to improving trust in audit and corporate governance and remains a key priority for the FRC as it transitions to becoming ARGA.”
The full report is available to read here.