Grant Thornton UK has called for an independent public body to be established to appoint auditors for large companies, according to a report by the Financial Times.
The proposal is an attempt to break the dominance of the Big Four in the audit market of FTSE 100 companies.
The UK audit market has come under fire following parliamentary enquiries into the state of audit quality and independence. This has prompted the Big Four and a number of other large firms to hold meetings with the Institute of Chartered Accounts in England and Wales (ICAEW) to try to resolve the lack of competition in the UK audit market.
In July the FRC found that only seven of the FTSE250 companies were audit by non-Big Four firms, with Grant Thornton having fou clients and BDO three.
Grant Thornton’s head of quality and reputation Jonathan Riley told the Financial Times that an independent public body would address the “perennial issue that audit clients select and pay the auditor”.
Other solutions have also been proposed by the leading firms in the meetings held with the ICAEW, which have reportedly included imposing a temporary client cap for the Big Four on FTSE 350 clients to allow mid-tier firms to move into this market.
The increased scrutiny of the Big Four comes as 2018 has been marked by big corporate collapses such as Carillion and almost record breaking fines by the FRC to some of the top four firms. In June PwC UK was fined £6.5m for their audit of BHS.
This publication approached Grant Thornton, the Big Four and industry bodies for comment but failed to receive response by the time of publication.