The commission is holding an inquiry into the dominance of KPMG, Deloitte, Ernst Young and Pricewaterhouse-Coopers (PwC) in examining the accounts of publicly traded companies. The big four audit all but one firm in the FTSE 100.

BDO and Grant Thornton, the fifth and sixth biggest audit firms worldwide, and London-based Mazars, gave presentations to the inquiry last week, arguing that listed firms must be forced to regularly re-tender audit work to crack the big four’s stranglehold of the market. More than 70 per cent of FTSE 100 companies have not held a competitive tender to appoint auditors for at least 15 years.

Grant Thornton told the inquiry that auditors typically hold office for an average of 48 years, and that this buttressed the position of the big four.

The firm added that the major accountants had built up cosy relationships with the City due to their perceived brand strength, with some bankers even requiring particular auditors to be hired when they are appointed to advise a listed group.