However, the dominance of the Big Four remains, as all FTSE 100 companies continue to be audited by EY, Deloitte, KPMG or PwC.

Improving competition across the FTSE 350 audit market remains a key focus for the FRC, and the UK Government recently consulted on major reforms to improve choice and competition in the audit market.

The FRC’s latest report, Key Facts and Trends in the Accountancy Profession (KFAT) found that the five largest challenger firms outside the Big Four audited 19 FTSE 350 companies, up from 10 the previous year.

Despite the challenging economic environment, the Big Four firms increased their average audit fee income per Responsible Individual (RI) by 7.7%. Those firms outside the Big Four, with Public Interest Entity clients, also increased their average audit fee income per RI by 4.7%.

There has been a continual increase in the average audit fee income per RI for all firms since 2004 when the FRC began its data collection for this publication.

Sir Jon Thompson, FRC CEO, said: “It is encouraging that the challenger firms have increased their share of the FTSE 350 audit market, albeit from a low base, however it is clear the Big Four continue to dominate the FTSE audit market.

“Improving competition across the audit market and ensuring audit firms focus, above all else, on delivering high-quality audit is essential to improving trust in audit and corporate governance and remains a key priority for the FRC as it transitions to becoming ARGA.”