Auditor Changes Roundup: 2014 Annual Summary

BDO had another great year in terms of SEC audit clients. The Global Six firm won 54 new clients compared to 14 losses, for a net increase of 40 engagements in 2014, to go along with a net increase of 57 last year. While BDO’s growth in 2013 was largely due to acquisitions, 2014 saw more organic growth.

Speaking to Accounting Today, chief executive officer Wayne Berson noted that “Organically, we added 39, and by expansions we added 15, so even if you back out the expansion-related additions, we would have comfortably maintained our position.”

The table below presents a comprehensive view of the gains and losses of the major global and national firms. It shows how many SEC audit clients each auditor gained or lost, and also the auditor from or to which the client was won or lost.

(Click to expand the image.)

2014 Auditor Changes copy

Other firms to post strong wins in 2014 were KPMG (+15), Marcum (+15), and Grant Thornton (+12).

At the other end, EY (-43) and PwC (-28) had heavy losses, continuing a trend we saw in 2013. EY lost 65 total clients against a gain of 22. Of the 65 losses, 31 went to other Big Four firms, including 15 that switched to KPMG. PwC lost a total of 49 clients against 21 wins. 32 of their losses switched to other Big Four firms, including 13 to EY.

But client wins and losses don’t quite tell the whole picture. Deloitte, for example, may have lost a net of 8 clients, but their net increase in audit fees was $27.6 million. In other words, the clients that they won brought in significantly more fees than those they lost (assuming the fees remain relatively constant).

BDO topped the list in both respects, with a net increase in audit fees of about $36.2 million. KPMG continued its string of strong performances, bringing in about $35.7 million. Grant Thornton had a good year, with an increase of $13.5 million, and Marcum rounds out the top five with a net increase of $5 million in new audit fees.

In the following tables, we disaggregate the auditor changes by the size of the companies gained or lost, as represented by the companies’ filing status. The first table shows auditor changes for Large Accelerated Filers, i.e., those with a worldwide public float of more than $700 million.

LAF 2014 Wins and Losses copy

The next table presents a sample of the largest wins and losses for Accelerated Filers, which are companies with public float between $75 million and $700 million.

AF 2014 Wins and Losses copy

Finally, the last table presents the top five gains and losses for Smaller Reporting Companies.

SRC 2014 Wins and Losses copy

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