Q3’14 Big4 Auditor Change Summary

Another quarter gone by, another summary put together. This one covers the client gains and losses by Big4 firms in the July – September 2014 period. Note that this only takes into account SEC registrants, and numbers are based on the 8-K filing date.

Starting with the losses:

Auditor Number of engagements lost*
Ernst & Young LLP 12
PricewaterhouseCoopers LLP 10
KPMG LLP 8
Deloitte & Touche LLP 6

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

15 out of 22 of the PwC and EY clients that switched auditors ended up going to other Big4 firms. Conversely, most of the former KPMG and Deloitte clients went with smaller firms, with just 3 out of 14 sticking with the Big4. This trend mirrors what we saw in the second quarter.

Now for the gains:

Auditor Number of new engagements
KPMG LLP 17
Ernst & Young LLP 7
PricewaterhouseCoopers LLP 7
Deloitte & Touche LLP 3

It should be noted that of KPMG’s 17 new clients, 13 came as a result of the KPMG acquisition of Rothstein Kass, meaning just 4 came organically.

On a net basis, only KPMG made progress in the second quarter, but even that comes with an asterisk; as just noted, most of the gains were a result of the Rothstein Kass acquisition. Factoring those out, KPMG was a net -4. EY was net -5, PwC -3, and Deloitte also -3. A down quarter for the Big4, though hardly earthshaking.

When we’re not putting together quarterly summaries, we publish weekly updates here on the Big4 Auditor Carousel. We’re on Twitter, too @auditorcarousel.

Round and round and round…

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…

Q1’14 Big4 Auditor Change Recap

The first quarter of 2014 is over, and I’ve put together a breakdown of Big4 auditor client gains and losses during the January – March period. Note that this only takes into account SEC registrants.

Starting with the losses:

Auditor Number of engagements lost*
Ernst & Young LLP 22
PricewaterhouseCoopers LLP 15
KPMG LLP 9
Deloitte & Touche LLP 6

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

Note that EY had 5 related companies all switch to KPMG. For purposes of this analysis, the 5 related companies were counted as 1.

Of EY’s losses, six were cases where EY declined to stand for reappointment. This is the second quarter in a row where EY has had double digit losses. Hard to imagine this isn’t a conscious decision on Ernies part to focus on the quality, rather than quantity of audit clients. Same story for PwC, albeit to a lesser extent.  Four of their losses were choices to not to stand for reappointment. KPMG had four of their former clients choose 2nd tier firm BDO as new auditor.

Now for the client gains:

Auditor Number of new engagements
KPMG LLP 15
Deloitte & Touche LLP 7
Ernst & Young LLP 6
PricewaterhouseCoopers LLP 3

Noteworthy gains for KPMG include American Airlines and Natus Medical. Deloitte picked up Hillshire Brands and FTD Companies. Big wins for PwC include Intuitive Surgical and Snyder’s-Lance (the geniuses who sandwich peanut butter between 2 orange crackers).

KPMG had the most wins, on a gross (+15) and net (+4) basis. They had no problem lapping up EY and PwC castoffs. PwC was net -12 clients and EY was net -16! Deloitte finished at a respectible +1.

That wraps up the Q1’2014 summary. Stop by again soon and catch our regular weekly updates right here on the Big4 Auditor Carousel. You can also check us out on Twitter for intra-week updates.

Round and round and round…