Between them, PriceWaterhouseCoopers, KMPG, Deloitte and EY have received more than $1.7 billion in federal government contracts in recent years. A recent auditor-general's report and an ongoing inquiry into government procurement has revealed former and current chief executives had regular catch ups, but the companies maintained they competed for contracts.

Shadow assistant treasurer Andrew Leigh and deputy chair of the joint standing committee of Public Accounts and Audit Julian Hill have written to Australian Competition and Consumer Commission boss Rod Sims to lay out their concerns about the market power of the accounting and consultancy firms.

The revelation that former Deloitte chief Cindy Hook, EY boss Tony Johnson, KPMG chief Gary Wingrove and PriceWaterhouseCoopers boss Luke Sayers had met on six occasions, including at least twice in private dinners over the last two years was an "immediate concern," the letter said.

Consulting services to government are increasingly procured from the "big four" accounting firms, the MPs wrote. The Labor MPs believe less consulting and contracting work is going to small and medium sized businesses than previously believed.

"One of the related issues is the reported difficulties for SMEs in accessing consulting and contracting work for government and potential risks to competition in the tendering and distribution of such work."

The letter cites overseas scandals related to the firms, including the decision by the UK parliament to ask the country's competition watchdog to investigate the structure of the market there.

"Like the UK however, concerns exist regarding perceived internal conflicts of interest between the traditional auditing function vs. the faster growing and profitable consulting service market."

At a recent hearing, the big four companies were grilled on how they addressed internal conflicts of interest between the arms of the business responsible for financial auditing and that responsible for consulting to companies and government departments.

In the letter, the MPs asked Mr Sims if the allegations raised in news reports and at the hearing are enough to warrant an investigation into "cartel-like behaviour" by the watchdog, or if an investigation has already begun.

Dr Leigh and Mr Hill also ask for a public explanation if the ACCC chooses not to make further inquiries.

Mr Hill said he and Dr Leigh wrote to the ACCC before the joint committee's inquiry handed down its report due to the "quite stunning admissions or lack of response and the subsequent media reporting".

"We felt that it warranted the ACCC's attention and consideration," he said.

Questions around the private dinners were justified by fines dolled out to the Italian arms of the companies totalling 23 million euros for collusion on government contracting, Mr Hill said.

"Public confidence in the big four is absolutely critical to the Australian economy and the wider capital markets because of their financial statement auditing functions," he said.

"In that context discussions with regulatory and professional bodies are perfectly sensible but I can understand public questions or concern regarding private dinners between businesses, which in the UK have described themselves as an oligopoly."

A spokeswoman for the ACCC said "competitors are not precluded from meeting or talking with each other, and without further details about specific concerns we're not able to comment further".

The boom in the use of consultants in the public sector has been a source of ongoing controversy, with Labor already announcing it intends to slash spending on contractors if it wins government.

Mathias Cormann, Finance Minister and now with responsibilities for the public service, hit back at the call on Monday night.

"The suggestion that business dinners are evidence of collusion and cartel behaviour is absurd," he said.

"The services of these firms, like any other service procured by the Government follows a competitive and transparent process outlined under the Commonwealth Procurement Rules."

The minister said all government procurement was required to achieve value for money.

"Establishing a panel arrangement requires a transparent and competitive procurement process, which leads to a number of suppliers being appointed under a contract or deed of standing offer," he said.

"Suppliers are assessed against evaluation criteria, including an assessment of the relevant financial and non-financial costs and benefits of each tender."