Auditor Changes Roundup: 2020 Annual Summary

Note: This blog has been updated to reflect a correction in the first table. A previous version displayed gross audit fees won, the updated version shows net audit fees won.

Baker Tilly US LLP, with a net of 26 new SEC audit clients, accounts for the largest number of new clients among auditor changes in 2020. BF Borgers CPA PC followed with a net of 21 new SEC audit clients.

Ernst & Young’s 37 engagements represents the largest number of total new client engagements among all audit firms in 2020; Baker Tilly was close behind with 33 engagements for the year. BF Borgers and Deloitte followed with 27 and 26 total engagements for the year, respectively.

As mentioned in Accounting Today, 31 of Baker Tilly’s 33 new engagements were a direct result of the November merger with California-based Top 100 firm Squar Milner.

Overall, there were 158 engagements and 223 departures in 2020 among the Big Four and major global and national firms.

EY and Deloitte ranked first and second in terms of new audit fees won in 2020, bringing in $57.14 million and $42.69 million, respectively. PwC landed the third spot for the most new audit fees won with $38.10 million, despite a net loss of 22 clients.

In the following tables, we disaggregate the auditor changes by the size of companies gained or lost, as represented by the companies reported filing status. The first table shows auditor changes for Large Accelerated Filers, i.e. those with a worldwide public float of more than $700 million.

Auditor Changes in 2020 among Large Accelerated Filers

Deloitte was the top firm for Large Accelerated Filer wins in 2020 (for the fourth consecutive year) with a net of 9 new SEC audit clients. EY netted 5 new Large Accelerated Filers.

The next table presents a sample of the largest wins and losses for Accelerated Filers, which are companies with public float between $75 million and $700 million. Companies identifying as an Accelerated Filer + Smaller Reporting Company are included in the analysis for Accelerated Filers, as these companies remain subject to the requirements that apply to Accelerated Filers, including a required auditor’s attestation of management’s assessment of internal control over financial reporting.

Grant Thornton led the way among Accelerated Filer wins with 13 new SEC audit clients and 4 departures, for a net of 9 SEC audit clients in 2019. Crowe and EY both netted 5 new SEC audit clients.

In total, there were 79 wins among Accelerated Filers in 2020.

The last table presents the top gains and losses for Smaller Reporting Companies. Companies in this population are a combination of companies that did not identify as Large Accelerated Filers, Accelerated Filers, or Accelerated + Smaller Reporting Company. For a further disaggregated list by all separate filer statuses, please contact us.

Baker Tilly, with a net of 15 new SEC audit clients, was the top firm among Non-Accelerated Filers and Smaller Reporting Companies. As mentioned, the merger between Baker Tilly and Squar Milner in November 2020 contributed substantially to the 17 wins for the firm.

BF Borgers came in second for Non-Accelerated Filers and Smaller Reporting Companies in 2020, with a net of 14 new SEC clients.

In total, there were 219 wins among Non-Accelerated Filers and Smaller Reporting Companies in 2020, a significant decrease from the prior year’s 428 wins.

This analysis uses data from the Auditor Changes database, powered by Audit Analytics.

For more information about Audit Analytics or this analysis, please contact us.

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