Broker-Dealers are firms or individuals in the business of buying and selling securities on their clients’ behalf or for themselves. They are required by the SEC to have their financial statements audited annually, disclosed in x-17a-5 filings.
The Broker Dealers database powered by Audit Analytics contains records dating back to 2001 and covers all SEC Registered Broker-Dealers. There are countless ways to look at this market, including who audits broker-dealers, benchmarking by total asset value, and identifying broker-dealer parent relationships.
In 2021, 287 firms conducted audits of 3,181 broker-dealers in this market. In this analysis, we look at the audit firm market share of broker-dealers broken down by region: Eastern US, Western US, and Foreign market shares.
The Big 4 collectively audited 16.9% of all broker-dealers in 2021. Compared to 2020, this is a 1.8% increase in their market share dominance. While the majority of the top 20 firms were similar to the previous year, Sanville & Company broke through the threshold. Sanville & Company ranked 23rd in 2020 compared to 8th in 2021 for total broker-dealer clients after their market share grew by 112%. Together, the leading 20 firms audited 47% of the broker-dealer’s market.
The largest population of broker-dealers is in the Eastern US, correspondingly with 220 firms auditing 1,974 broker-dealers. In total, the Big 4 only held 17.6% of this market share in 2021. PwC led the group with 95 clients and a 4.8% market share. Audit firms outside of the top 10 ranking firms each held less than 2% of the market share. These firms made up 66.2% of the Eastern US market share in 2021.
In 2021, 171 firms audited 1,165 broker-dealers in the Western US region. Alvarez & Associates Inc CPAs and EY tied as the leading firms with 55 clients each, auditing 4.7% of all Western US broker-dealers. Despite the Big Four auditing most broker-dealers overall, KPMG ranked 11th in client numbers in this market share. Audit firms with a market share below 2.8% comprise 63.3% of the Western US broker-dealer’s market.
Broker-dealers located outside of the US make up the smallest sector of the market. Twelve firms audited only 24 broker-dealers in foreign locations in 2021. Evidently, the leading firm EY alone audits a quarter of all foreign broker-dealers. KPMG followed second, while PwC, Raich Ende Malter & Co LLP, and RSM tied for third. Although Deloitte is ranked 6th in market share, the Big 4 collectively audits 58.3% of foreign broker-dealers.
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