Big Four Accounting Firms Face Decline in UK Listed Clients Amid Market Shifts

LONDON, United ​Kingdom, ​2 December 2024 – The UK’s four largest accounting companies – Deloitte, PwC, EY and KPMG – ​experienced a reduction in the ​number of customers listed this year, with small businesses continuing to gain market share. ​This trend reflects the evolution of the UK audit market, and intermediate-level companies ​increasingly guarantee audit commitments.

According to a report published ​by Bloomberg Law, the four major companies have seen a decline in their ready-made clientele, indicating a gradual erosion of their field ​in the sector. KPMG was particularly affected, resulting in losses among the four largest in the market. This change suggests that efforts to increase competition in the audit market are yielding results, as small businesses benefit from opportunities to increase their presence.

Despite these changes, the ​four major companies continue to maintain strong retention in the audit ​market, particularly among the largest companies. They continue to audit all FTSE 100 companies, highlighting their position at high market levels. However, the increasing presence of small businesses ​in the audit ​of FTSE ​250 and other listed entities indicates a diversified situation.

The Financial Information ​Council has actively promoted competition in the audit market to improve quality and reduce systemic risks associated with market concentration. The number of audit firms providing services to FTSE 350 has increased over ​the past four years, from 24 ​in 2019 to 33 in 2022. However, in 2022, the Big Four verified 90% of FTSE 350 companies, ​highlighting the gradual nature of the change in this sector.

Market dynamics, including economic uncertainties and changing customer expectations, have influenced these changes. Big Four ​consulting arms ​have been confronted with the slowdown because clients are taking ​a cautious approach to economic volatility. This environment has created opportunities for ​small ​businesses to offer more competitive and personalized services, attracting businesses looking for alternatives to traditional Big Four listeners.

Faced with these challenges, the four major ones have implemented policy measures such as job ​reduction and restructuring to meet current market demands. For example, PwC UK’s partners saw ​a reduction of £44,000 while the ​company sought to reduce costs due to a slowdown ​in customer demand. Similarly, Deloitte’s partners ​faced a reduction of ​48,000 pounds in comparable circumstances.

As the audit market continues to evolve, the ​four majors should ​adapt their strategies to maintain their ​market position. At the same time, small ​businesses are likely ​to ​leverage their recent gains to establish themselves more as viable alternatives for listed companies seeking audit services. The ongoing efforts of regulators to promote competition and improve the quality of audits will play a ​crucial role in the development of the future UK audit market.