PwC said recently that it’ll split its current UK assurance practice into two different businesses, amid increasing pressure from regulators.
The measure will be effective July 1, with the audit practice focusing on external audit and audit-related services, the Big Four accounting firm noted.
Internal audits and issues such as cybersecurity and technology risk will be the focus of the firm’s risk assurance practice.
The big four firm said it’d spend an £30 million (US$38.1 million) a year to improve its audit business. Some of the initiatives will include adding more than 500 auditors to its 5,500-strong audit team, more face-to-face training for auditors, and a new national digital audit team.
These heavyweights have been slammed for their dominance in UK’s audit market after high-profile corporate collapses in the past year.
The call for the big four breakup started in May 2018 when two parliamentary committees issue a scathing report which accused the big four of being “complicit” in the collapse of government contractor Carillion.
The Competition and Markets Authority (CMA) in the UK recommended last month an operational split between the big four’s audit and consulting businesses, which requires appointing different chief executives and boards for audit and consulting arms and separate financial statement.
The CMA also proposed joint audits by both large and smaller accounting firms, in addition to having corporate audit committees to be held accountable for their choices of auditors.
PwC said this latest move is not an operational split between its audit and consulting arms but is aimed to improve audit quality.
Another big four firm KPMG said earlier the it’d increase the oversight of its UK audit practice and stop providing advisory services to audit clients, but didn’t announce plans to split its audit and consulting arms.
Deloitte—the largest big four firm in 2018 in terms of revenue—and EY have not made any public announcements about how it’d go about its audit and consulting arms yet.