Big Four Firms Dominate UK Audit Market, Smaller Firms Gain Work

The Big Four audit firms are concentrating on work with the largest UK-listed companies, leaving the door open for mid-sized firms to hoover up smaller listed company work, according to a new report.

Deloitte, KPMG, and PwC each vetted the financial accounts of 25 corporate clients in the FTSE 100 index in May, with Ernst & Young totaling 22 such clients, Adviser Rankings said Monday. The index tracks the 100 biggest UK-listed companies by market capitalization. Mid-sized audit firms counted just three of the companies in the index as clients.

The big firms maintained their grip on FTSE 100 audits over the three months prior. Deloitte added three clients, including the airline EasyJet Plc; KPMG picked up two clients, including pharmaceutical giant AstraZeneca Plc; and PwC snagged the bank NatWest Group Plc.

The Big Four also dominated the rankings when audit firms were compared by the market value of all their listed clients, taking the top four spots, led by KPMG.

The biggest audit firms have increasingly concentrated on large company audits in the wake of a recent focus on tighter regulation of the industry. The 2018 collapse of KPMG-audited construction company Carillion Plc prompted promises of a broader rethink for audit rules.

One part of this effort included encouraging more mid-sized firms into the audit market for listed companies, rather than private businesses. The UK’s audit watchdog, the Financial Reporting Council, continues to push for this shift despite the government’s repeated failure to pass audit revamp legislation.

That trend is clear in the FTSE 250 index, where mid-sized audit firms have ramped up their client numbers more than fourfold over the past 10 years, according to Adviser Rankings, from nine in 2016 to 43 in 2026. The big beneficiary is BDO, with 24 FTSE 250 clients in the most recent rankings, compared to just two a decade ago. Other new entrants into the FTSE 250 rankings include RSM’s UK audit arm, Forvis Mazars, and MHA Audit Services.

There are now 11 different auditors serving FTSE 250 clients, up from six in 2016, the research showed.

PwC, also known as PricewaterhouseCoopers, continued to audit the largest number of listed companies across the stock market, with 204 total clients, ahead of BDO and EY. Deloitte and KPMG now audit fewer listed companies overall than two mid-sized firms, BDO and PKF Littlejohn.