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Non-Big Four audit firms have increased their share of Public Interest Entity (PIE) audit engagements to 40% in 2024, according to the Financial Reporting Council’s latest Audit Market and Competition Update.
According to the regulator, this shift reflects efforts to develop a more resilient and competitive market.
The report shows the Big Four, which is made up of Deloitte, EY, KPMG and PwC, continue to dominate UK audit but have seen their overall PIE share fall from 78% at the start of the decade. The FRC said recent reforms were helping a wider set of firms build capacity and extend their presence in the market.
Among the initiatives highlighted is the Future of Audit Supervision Strategy, which is reshaping how the regulator oversees firms with the aim of strengthening resilience.
The update also points to the System of Quality Management Scalebox programme, designed to support smaller practices, and to a study of the small and medium-sized enterprise market that identifies ways to improve audit access for companies that make up 99% of the private sector.
Richard Moriarty, chief executive of the FRC, said: “A well-functioning audit market is essential for maintaining confidence in UK plc and enabling businesses to attract the capital they need to grow.
“While we’ve seen encouraging progress, with non-Big Four firms now conducting 40% of PIE audits, achieving a resilient audit market requires collective action from all stakeholders – audit firms, companies, and regulators alike.”
“The FRC is committed to working collaboratively to embed proportionality, reduce unnecessary burdens, and build capacity across the whole market.”
