Measures designed to tackle the continuing dominance of the Big Four accountancy firms in the UK audit market are, "a total damp squib that will do nothing to enhance competition or choice in the market," according to a leading professor of accountancy.

The list of 15 recommendations was announced last week by the Market Participants Group, established by the Financial Reporting Council (FRC) in October 2006. The FRC is a London-based regulator responsible for promoting confidence in corporate reporting.

Prem Sikka, Professor of Accountancy at the University of Essex and a long-standing critic of the Big Four, said: "This will have no real impact. I don't see anything there (among the group's recommendations) that will increase competition or increase audit quality.

"All that's happened is that there's been a lot of talking, but there is nothing really to show for it. The trouble is that the FRC doesn't have either the ability or the inclination to properly address this problem. It is partly financed by the big accountancy firms and is really too close to them to do anything meaningful."

The Big Four firms - PricewaterhouseCoopers, Deloitte, KPMG and Ernst & Young - have a 97% market share of auditing FTSE-350 companies. They were also heavily represented in the market participants group, with John Connolly, a senior partner of Deloitte UK, and Peter Wyman, the head of PwC, both on it.

Sikka added: "If they had not included the big boys, they would have thrown stones at them. Measures that would really open the door to other firms include compulsory audit rotation, compulsory audit tendering, limiting a single accountancy firm to auditing, say, 40 to 50 of the FTSE-500 companies, and inviting in new players, such as perhaps the FSA (Financial Services Authority) or even the banks, into the audit market.

"Another solution would be a compulsory break-up of the Big Four - these sorts of measures have been used effectively by the US antitrust authorities in many industry sectors over the years. Unsurprisingly, the FRC has shied away from recommending such things."

The release of the Market Participants Group's recommendations last week followed a year of discussion and consultation which ended with the whittling down of hundreds of suggestions. The group was voted in last year with a brief to deliver solutions that would be market-led.

Paul Boyle, convenor of the group and chief executive of the FRC, said: "Our consultation with stakeholders during 2006 revealed a preference for market-led, rather than regulatory actions to address the risks arising from concentration in the audit market.

"The group's recommendations have the potential, over time, to reduce the barriers to market efficiency. The effectiveness of the recommendations will be determined principally by the choices made by companies, investors and audit firms."

The group's final recommendations included: l Audit firms should disclose the profitability of their work on audits on a comparable basis. Regulators should be seeking to promote audit choice.

l Mechanisms to improve access by the incoming auditor to information relevant to the audit, held by the outgoing auditor.

l Corporate boards should disclose any contractual obligations relating to the appointment of certain types of audit firms.

l The FRC should review the independence section of the Smith Guidance to ensure consistency with the relevant ethical standards for auditors.

Neil Craig, managing partner of BDO Stoy Hayward in Scotland, said: "The real issue here is perceptions of the quality of audit outwith the Big Four. There are a great many companies that BDO Stoy Hayward could audit just as well as the Big Four."

However, Andrew Howie, head of audit at Grant Thornton in Glasgow, welcomed the proposals. He said: "This is a package of measures that include helping the market to make informed choices in the selection of auditors in part through a better understanding of audit quality and greater transparency of the capabilities of individual firms.

"The full implementation of the recommendations will go a long way to help open up what is clearly an overly concentrated market."

However, he added: "We accept that a handful of the UK's largest companies through scale and very specialist resource needs are best served by a Big Four firm, but this argument does not stack up beyond this group."

David Ogilvie, a chartered accountant who runs his own Edinburgh-based practice Ogilvie & Co, doubts whether the Market Participants Group's 15 recommendations will do much to address the problem.

He believes that the Big Four's dominance of the FTSE-100 and top-listed company audits is entrenched.

Ogilvie, who did his training with Touche Ross and Coopers & Lybrand, and was subsequently a partner with Moores Rowland - now BDO Stoy Hayward - and PKF, said: "It's a cultural thing that could take decades to overcome. Elitism at the top of the big plcs persists - and will probably continue to persist - and people will continue to appoint people they know.

"The people at the top of the Big Four firms are still mainly old school and Oxbridge-educated, while those running the mid-tier firms are mainly educated at grammar schools and red brick universities.

"Management in the Big Four is more centralised; business is increasingly international and the Big Four's international networks are stronger and more cohesive."

Martin Gill, managing partner of PKF in Scotland, agrees that the Market Participants Group's recommendations will make little difference, arguing instead that clients will continue to choose their auditors on the strength of what they believe is best for them.

He said: "In the broader listed market there is competition, and accountancy firms outwith the Big Four are winning clients.

"Nationally, PKF has increased its share of listed companies in the six months to August by 14%.

"This was done without the aid of any intervention from the Financial Reporting Council but simply because the clients wanted PKF to do the work.

"It will, and must always be, a commercial decision by the client."