Q2’14 Big4 Auditor Change Summary

I put together a quick analysis of client gains and losses by each of the Big4 firms in the April – June 2014 period. Note that this only takes into account SEC registrants.

Starting with the losses:

Auditor Number of engagements lost*
PricewaterhouseCoopers LLP 18
Ernst & Young LLP 15
Deloitte & Touche LLP 10
KPMG LLP 9

* includes instances where auditors were dismissed, resigned, or declined to stand for reappointment.

Of the 52 companies making a switch, 20 stayed with the Big4, and 32 went to smaller firms. But the move to smaller firms wasn’t uniform. Nearly half of the PwC and EY clients that switched auditors ended up going to other Big4 firms. On the other hand, former KPMG and Deloitte clients overwhelmingly went with smaller firms, with just 4 out of 19 sticking with the Big4. Not to be lost in all this, second tier firms BDO USA and Grant Thornton each picked up a respectable 6 former Big4 clients. 

And on to the gains:

Auditor Number of new engagements
KPMG LLP 10
Ernst & Young LLP 10
Deloitte & Touche LLP 6
PricewaterhouseCoopers LLP 5

Unlike the losses, when it comes to picking up new clients, the Big4 firms like taking from each other. Of the 31 total new clients, 20 went from one Big4 firm to another. At the same time, Big4 firms are not opposed to taking on clients audited by the smaller firms, with nearly one-third coming that way.

On a net basis, only KPMG made progress in the second quarter, with a net +1 client. Deloitte was -4 on a net basis, Ernst & Young -5, and PwC a robust -13. Not quite as bad for PwC as EY’s net -16 from last quarter, but close enough. Congratulations to KPMG for taking in the most clients on a net basis for the third quarter in a row.

Stop by again to catch our regular weekly updates here on the Big4 Auditor Carousel. Check us out on Twitter too.

Another quarter wrapped up, and yet again we have confirmed…they just keep going round and round and round…

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