Audit Firm Tenure: Trends in Long-Lasting Relationships

How long is the average audit firm tenure for a company in the Russell 3000? As of 2021, that answer varies largely depending on the size of the company.

Overall, the average audit firm tenure in the Russell 3000 is 16.8 years. The median tenure is notably lower, at just 11 years. This is reflective of a select number of outlier companies with extremely long audit tenures causing the average to skew high.

Looking closer, the average and median tenures fluctuate widely by filer status. As of 2021, large accelerated filers in the Russell 3000 retain an audit firm for an average of 22.2 years, with a median of 17 years. In comparison, accelerated filers and non-accelerated filers average 12.3 and 5.9 years, with medians of 8 and 3 years, respectively.

Audit Tenures Spanning Over a Century

As previously mentioned, a select number of companies in this population are outliers, having engaged one audit firm for more than a century. Audit Analytics previously looked at a selection of these centenarians in 2017. Since that time, some companies have changed auditors, terminating the century-spanning relationships.

Two notable auditor changes occurred in 2021. First, PwC stood down as the auditor of UK-based Lloyd’s Banking Group [LYG] after 132 years. The change was brought about by the 2006 Companies Act, which began mandating auditor rotation. Unlike the EU and UK, the US does not currently have a cap on the length of audit firm tenure.

The second notable auditor change in 2021: General Electric [GE] and KPMG parted ways, ending an engagement that began in 1909.

As of 2021, 18 companies have retained an auditor firm for 100 years or more.

Several trends are notable within this group of long-tenured engagements:

Audit Firms

First, all century-spanning engagements are held by three of the Big Four audit firms: Deloitte, EY, and PwC. This is unsurprising, as these firms, or the predecessors of these firms, have been around since the mid-19th century.

While the other Big Four firm, KPMG, has been around since the late 1800s, their earliest engagement currently in the Russell 3000 began in 1928 with General Mills [GIS]. Previously, their engagements included longstanding tenure at GE and at the now-deregistered JC Penney, a relationship that originated in 1916.

Company Size

Additionally, nearly all the companies with 100+ year engagements are very large, with market caps well over $1 billion. The one exception is global footwear company Caleres, formerly known as Brown Shoe Company, which debuted on the NYSE back in 1913. However, Caleres reported over $2 billion in revenue for fiscal year 2021.


Lastly, 77.8% (14 companies) are in the Manufacturing industry. Manufacturing companies often have complex operations and procedures, across multiple segments, in a variety of locations. For example, Dow conducts worldwide operations, consisting of six businesses divided into three operating segments. For companies with complicated operations, there is benefit in retaining an audit firm with intimate knowledge of the company.

Votes Against Auditor Ratification

Worth noting, 5 of the 18 companies that have retained an audit firm for over 100 years have recent records of more than 5% of shareholders voting against ratifying the firm for another year. For example, at their 2021 Annual Meeting, 5% of P&G’s shareholders voted against ratifying Deloitte’s appointment to serve as the company’s auditor for another year. Moreover, more than 7% of shareholders for Trane Technologies, formerly known as Ingersoll-Rand, voted against ratifying PwC for both fiscal years 2020 and 2021.

While shareholders’ votes carry advisory power, the Board of Directors has no mandatory obligation to take voting results into consideration. This means shareholders voting in large numbers against their auditor does not mean the tender process for a new audit firm is imminent. Furthermore, votes against ratification and auditor changes can occur for myriad reasons. But it is an interesting event to note, especially with these companies that have longstanding relationships with their audit firm.

Interested in our content? Be sure to subscribe to receive our email notifications.