Auditor Changes Roundup: Q1 2014

BDO carried its momentum from 2013 into the first quarter of the new year, topping the SEC auditor changes again with a net increase of eight new clients. The firm’s biggest new clients were j2 Global and Neogen, which together brought in almost $5 billion of market cap.

As with last time, 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 either won or lost. (Click to expand the image.)

Q1 2014 Auditor Changes

EY had a bit of a rough quarter this time around, with a net loss of 19 clients. Of the Big Four, KPMG had the best quarter on a net gain of 5 new SEC audit engagements. KPMG added about $38 billion in market cap with its new clients.

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 Q1 14 Wins and Losses

It might be surprising to see SingerLewak involved with a Large Accelerated Filer. These large companies are predominantly audited by the Big Four, and the Global Six altogether audit about 98% of Large Accelerated Filers. So it is fairly unusual to see a firm the size of SingerLewak with a Large Accelerated Filer. With the loss of this client, the firm no longer audits any Large Accelerated Filers. Interestingly, the client in this case was j2 Global, noted above, which switched to BDO. In the 8-K describing the auditor change, the company noted that the “Audit Committee found this change was advisable in light of the Company’s significant growth and geographic expansion since first engaging Singer in 2007.”

The next table presents the top five gains and loss for Accelerated Filers, which are companies with public float between $75 million and $700 million.

AF Q1 14 Wins and Losses

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

SRC Q1 14 Wins and Losses

With the Smaller Reporting Companies, Terry L Johnson CPA tops the list and Patrick Rodgers CPA pulls up the rear. These two are connected. Many of Terry L Johnsons’ wins for the quarter were former clients of Patrick Rodgers, whose registration with the PCAOB was revoked.

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