A recent analysis by the Danish Competition and Consumer Authority sheds light on the lack of competition in the audit market for Public Interest Entities (PIE) in Denmark. PIE companies, including listed companies, financial institutions, and insurance companies, have limited options when choosing audit firms due to market concentration.

In 2020, only eight companies in Denmark conducted audits for PIE entities, totaling 0.6 billion Danish kroner in revenue.

The analysis questions whether the extensive regulations governing the audit of PIE entities could be structured more effectively to promote competition while maintaining the core objectives of ensuring independence and quality in audits.

The regulatory framework includes EU regulations on auditors and specific Danish certification requirements. While the implementation of EU regulations seems to allow for competition in the audit market, the Danish certification requirements for auditors signing off on reports for financial institutions and insurance companies pose barriers to entry for new players, contributing to market concentration.

The analysis was conducted by the Danish Competition and Consumer Authority for the Ministry of Industry, Business, and Financial Affairs.