The UK’s top accountancy firms are set to face a major shake-up amid a series of proposals put forward by the competition watchdog.

The Competitions and Markets Authority (CMA) introduced a series of radical reforms to tackle various issues it had flagged in the accountancy industry.

The proposals are set to challenge the dominance of the ‘big four’ accountancy firms within the UK industry, namely, KPMG, PwC, EY and Deloitte.

Specifically, the CMA recommended dividing audit and advisory businesses to ensure separate management and accounts.

In addition, the proposals recommended oversight for those who appoint auditors in a bid to maintain independence.

Lastly, the watchdog proposed the introduction of a “joint audit” system, with both a ‘big four’ auditors and a ‘non-Big Four’ company working in collaboration on an audit.

Andrew Tyrie, CMA chair, commented: “Addressing the deep-seated problems in the audit market is now long overdue. Most people will never read an auditor’s opinion on a company’s accounts. But tens of millions of people depend on robust and high-quality audits. If a company’s books aren’t properly examined, people’s jobs, pensions or savings can be at risk.

“The CMA will now consult on a number of proposals for robust reform. These intractable problems may take some years to sort out. If it turns out that the proposals are not far-reaching enough, the CMA will persist until the problems are addressed.”