Banks in UK face probe for their use of Big Four auditors

THE GOVERNMENT has asked regulators to investigate whether banks help to entrench the Big Four auditing firms’ dominance through restrictive lending agreements with companies. The Budget included a call to the Office of Fair Trading to probe whether bank covenants lock out smaller auditors.

The Financial Reporting Council had expressed concern to lawmakers last year that clauses in some covenants force companies to use only one of the Big Four accounting firms – PwC, Deloitte, KPMG and Ernst & Young.

The Financial Reporting Council said yesterday that the government had listened to its concerns and hoped the OFT would push ahead with a probe.