There were 290 Canadian auditor departures in 2018, a 10% increase from the 264 in 2017. While the majority of departures continue to be from dismissals (80%), the percentage of resignations is the highest it has been in four years at 20%.
The table below presents a comprehensive view of the gains and losses of the Big Four and national firms in Canada during 2018. It shows how many SEDAR audit clients each auditor gained or lost, and also the auditor from or to which the client was won or lost.
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Canadian Accountant ranked the Big Four in terms of net engagement gains, net audit fees won, and total market capitalization of new clients. KPMG led all three categories with a net client gain of 16 engagements, bringing in CAD 12.4 million in new audit fees and a combined market capitalization of CAD 122.4 billion. Although Ernst & Young’s 12 new clients were offset by the departure of 12 clients, they scored second place in the other two categories, gaining CAD 7.3 million in new audit fees and CAD 5.1 billion in total market capitalization. EY’s win was driven primarily by gaining Enghouse Systems Limited [ENGH] with a CAD 2 billion market cap.
When comparing net engagements won by all accounting firms, KPMG retained second place overall. They were surpassed only by national firm Dale Matheson, which netted 31 new client engagements. Dale Matheson has consistently secured either a first- or second-place ranking in terms of net engagements since 2015. Their largest win in 2018 was Golden Leaf Holdings Ltd. [GLH], which contributed CAD 110 million of their CAD 517 million total market capitalization and audit fees of CAD 554 thousand. MNP LLP, another firm that has steadily been in the top five for net engagement gains the past four years, came in just below KPMG with a net of 15 new engagements. MNP’s largest client gains by market capitalization consisted of two cannabis companies, CannaRoyalty Corp. [OH] and LiveWell Canada Inc. [LVWL], with market caps of CAD 174 million and CAD 168 million, respectively.
Two Big Four firms top the charts in terms of net audit fees gained. KPMG netted CAD 11.3 million worth of new fees. Following behind, EY won a net of CAD 4.5 million in fees, while Dale Matheson gained a net of CAD 0.9 million in new audit fees.
The bulk of KPMG’s new audit fees were acquired with the addition of Suncor Energy Inc. [SU], which brought in CAD 5.2 million in audit fees. EY’s CAD 7.3 million of new fees are, in large part, attributed to two new clients: SunOpta Inc. [SOY], which brought in CAD 3.1 million in audit fees and Superior Plus Corp. [SPB] with CAD 1.9 million worth of fees.
Audit Analytics tracks audit fees, auditor changes, controls, and restatements for Canadian issuers. For an online demonstration or to learn more about these data sets, can call us at (508) 476-7007 or e-mail info@auditanalytics.com.