Set 15-year limit on firms' accountants, investors urge UK watchdog

* Pension, investment firms want audit tenure limit of 15years

* Say watchdog not doing enough to secure auditorindependence

LONDON, May 23 (Reuters) - Pension and investment firmsurged the UK's competition watchdog on Thursday to forcecompanies to change accountants regularly, saying it mustmaintain its focus on the matter to prevent long contractsleading to risky complacency.

USS Investment Management, Legal & General InvestmentManagement, Royal London Asset Management, which together runbillions of pounds worth of assets, were among signatories of aletter sent to the Competition Commission urging it to introducea 15-year limit on the tenure of company auditors.

In February, the Competition Commission published the resultof an industry investigation showing that UK companies found ithard to switch accountants. The report also showed there was atendency for auditors to focus on satisfying management ratherthan shareholder needs.

At the time the Commission proposed that companies put outtheir audit work to tender every five to seven years and changeaccounting firms every seven to 14 years.

But the investment firms, along with the UK ShareholderAssociation, said on Thursday the watchdog had since letshareholder meetings address the issue via votes on auditorreappointment - something it claimed was not sufficient toprotect the interests of investors.

"Without a cap, we believe that companies' ability to resistthe pressures to maintain indefinitely the audit relationshipwill be weakened," the letter said.

"It remains extremely rare for a majority of shareholders tovote against companies' resolutions, even in high profile caseslike remuneration," it added.

The Competition Commission declined to comment. It will setout in July how it plans to resolve the findings of itsinvestigation.

The accountancy industry has been under scrutiny since thefinancial crisis gave rise to claims that auditor complacencywas in part to blame.

But the European Parliament recently watered down plans toforce companies to change accountant more regularly, placing a25-year limit on auditor tenure, versus the six-year limitoriginally suggested.

The United States audit regulator is also considering a capon tenure.