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UK Audit Market Competition

The Competition Commission is currently involved in a  “Statutory audit services market investigation” and the recent publication of “provisional decision on remedies” has provoked some debate reported in the financial press.

CC-auditservicesAudit public dataset

The Competition Commission (CC) investigation also includes an Audit public dataset as part of the evidence (Competition Commission, 2012b).

This dataset provides 7960 observations on 856 UK companies from 2000 to 2011. The CC requested data from all firms that had audited a FTSE 350 or Top Track 100 company during the period 2006 to 2011.  The requested data formed two datasets: the engagement dataset, which is private to the CC investigation, and the public dataset, which includes audit fee, audit qualification and other public data.

The  Audit public dataset will be of interest to researchers and the accompanying report provides an excellent description of the data and the work undertaken to check and clean the data (Competition Commission, 2012a). Of particular interest was the following comment on the quality of audit fee information in commercial company information databases.

There are a number of sources that provide the required company-level information, including Bloomberg, Thomson Reuters, FAME and ICC. It was the CC’s intention to use one or more of these sources. However, a number of parties raised concerns about the reliability of these datasets including PwC, Deloitte and KPMG, while the problems with FAME were discussed in the OFT’s econometric analysis.13 The CC was told that publicly available data on audit fees is particularly prone to inaccuracies. For example, PwC found that 33 per cent of audit fee entries in a sample of FAME entries that it examined showed significant inaccuracies.

(Competition Commission, 2012a, Paragraph 10 footnotes deleted)


Competition Commission (2012a) Datasets in the market investigation for statutory audit services. Available at: http://www.competition-commission.org.uk/our-work/directory-of-all-inquiries/statutory-audit-services/evidence/audit-public-dataset (Accessed: 28 August 2013)

Competition Commission (2012b) Audit public dataset. Available at: http://www.competition-commission.org.uk/our-work/directory-of-all-inquiries/statutory-audit-services/evidence/audit-public-dataset (Accessed: 28 August 2013)

  1. markgreenwood
    15 October 2013 at 1:35 pm

    The Competition Commission has ruled that major UK-listed companies must put their audit work out to tender every 10 years. For more details:
    http://www.bbc.co.uk/news/business-24530625 (Audit market reforms … BBC News, 15 Oct 2013)
    http://corporatelawandgovernance.blogspot.co.uk/2013/10/uk-competition-commission-statutory.html (Competition Commission statutory audit services market inquiry – summary of final report published – Corporate Law and Governance blog, 15 Oct 2013)

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