The auditing of major UK companies is to be overhauled, according to new plans revealed by the Competition Commission (CC).
The accounting sector for large businesses is currently dominated by the so-called big four audit firms - KPMG, Ernst & Young, Deloitte and PwC.
The four audit some 90% of the UK's biggest firms on the stock market but concerns have been raised that they are too dominant and not always acting in shareholders' interest.
The new plan means all top 350 UK-listed companies must put their audit work out to tender at least every five years.
The tendering is expected to have a provision for it to be deferred for a further two years in exceptional circumstances, and the new rules are expected to be phased in over five years.
Firms would be banned from allowing only the big four from applying for audit roles.
The regulatory body said: "The CC has put forward a package of measures to promote competition and to ensure that competition is directed towards satisfying the demands of shareholders.
"The remedy package includes measures to improve the bargaining power of companies and encourage rivalry between audit firms - measures to enhance the influence of the audit committee - and measures to promote shareholder engagement in the audit process."
Only company audit committees will be allowed to negotiate and agree audit fees, initiate tenders, recommend appointments and authorise non-audit services.
Meanwhile the Financial Reporting Council is to get powers to boost competition in auditing, and will review every audit engagement of the 350 companies roughly every five years.
There is also expected to be a ban on banks requiring companies they lend money to being audited by one of the big four.
Shareholders of a company will also be allowed to vote annually on whether information in a firm's audit committee report is sufficient.
Furthermore, there will be tougher limits on advisory services auditors can offer clients whose books they already check.
However the CC did stop short of forcing companies to change auditors on a regular basis.
The audit industry was heavily criticised during the financial crisis for not scrutinising banks' books adequately, amid claims of an unhealthily close relationship with clients.
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