Big Four differ on restrictive covenants

Big Four auditors are taking differing stances over the issue of whether restrictive covenants are a feature of bank loan contracts, after the government called for an Office of Fair Trading (OFT) inquiry into the matter earlier this week.

At present, the FRC says it is not aware of any hard evidence that banks are insisting that companies they lend to use one of the Big Four auditors but “anecdotal evidence” suggests the practice could be commonplace.