KPMG UK is reportedly planning to split its audit practice from the rest of its UK business, according to The Times, after a number of reviews into the UK audit market called for a greater divide between audit and non-audit services.
In its Future of Audit report, the UK’s Business, Energy and Industrial Strategy select committee (BEIS) called for a legal and structural split of the Big Four, going beyond the recommendations of the Competitions and Markets Authority, which had called for an organisational split.
According to the report, KPMG is planning on voluntarily splitting its audit practice from the rest of its UK business regardless of whether or not the recommendations are introduced. KPMG has declined to comment on this.
If KPMG was to split, its audit practice alone would still be larger than Grant Thornton UK, the fifth largest network in the UK by fee income according to IAB’s UK Country Survey 2018.
Despite the public scrutiny over perceived conflicts of interest, the Big Four have defended their current business models.
A spokesperson for EY UK said: “EY believes a multidisciplinary model provides the structure, breadth and depth of technical skills and industry expertise necessary to deliver high-quality audits for large and complex companies. It aligns with the operations of the large audit firms in other major markets allowing a seamless service globally.
“In addition, a multidisciplinary model helps to ensure that accountancy continues to be a stimulating and varied career which is able to attract and retain the capable and motivated people essential to delivering quality over the long term.
However BDO, the UK’s sixth largest network by fee income, said that it was scenario planning for a possible split, though said it had nothing to announce at this time.
This publication has also reached out to Deloitte and PwC and will update this article as when comment is received.