Audit market competition update sets out FRC’s evolving approach
News types: Publications
Published: 4 December 2024
The Financial Reporting Council (FRC) has today published its annual Audit Market and Competition Update for 2024, highlighting developments in the UK audit market and setting out the FRC’s evolving approach to competition.
The report shows that the Big Four audit firms (Deloitte, EY, KPMG, and PwC) continue to dominate the market, however challenger audit firms’ share of FT350 audit engagements grew to 13% in 2023.
The total audit fees earned by firms in the PIE (Public Interest Entity) market continued to increase, reaching £1.4 billion in 2023, with growth across multiple firms.
The FRC is evolving its approach to audit market competition, addressing stakeholder concerns such as differences in quality between the largest and smaller audit firms. Its approach focuses on ensuring good-quality audit services are accessible to UK companies of all sizes to support their access to capital and growth.
In the last year, the FRC progressed a number initiatives to enhance the functioning of the whole audit market such as supporting the operational separation of the audit and non-audit practices of the Big Four and supporting smaller firms to develop and maintain audit quality as they grow, through the FRC’s audit firm Scalebox.
Richard Moriarty, FRC CEO, said:
“Access to quality audit is a key enabler for economic growth. Whilst the Big Four continue to dominate the market for the audits of the largest UK businesses, in the last 12 months other audit firms have successfully grown their businesses and they are now taking on more complex audits. This report underscores our commitment to ensuring the whole market works as effectively as it can.”