Auditor Changes Roundup: Q2 2015

BDO has been at or near the top of our quarterly auditor changes roundups for a long time now. The global audit firm once again led all major accounting firms in new SEC clients in the second quarter of 2015 with 16 wins and a net gain of nine.

Interestingly, as noted by Dan Hood in Accounting Today, “the vast majority of its gains were from other large firms, particularly the Big Four” despite its recent acquisition activity.

The table below presents a comprehensive view of the gains and losses of the major global and national firms. It shows how many SEC audit clients each auditor gained or lost, and also the auditor from or to which the client was either won or lost.

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In the following tables, we disaggregate the auditor changes by the size of the companies gained or lost, as represented by the companies’ 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.

Deloitte led the Big Four accounting firms, with a net gain of five Large Accelerated Filers in the second quarter of 2015.

The next table presents wins and losses for Accelerated Filers, which are companies with public float between $75 million and $700 million.

Q2 2015 AF Wins and Losses

Hein & Associates had another good quarter. The regional firm recently placed in the Audit Analytics 2014 ranking of the Top 50 Auditors Ranked by Total SEC Registrants.

Finally, the last table presents the top five gains and losses for Smaller Reporting Companies.

Q2 2015 SRC Wins and Losses

Terry L Johnson CPA saw a net loss of 20 clients in the second quarter, after gaining 28 SEC clients in 2014. The central Florida firm gained most of those 28 new clients from Patrick Rodgers CPA and Harris F Rattray CPA — both of whose PCAOB registrations were revoked — and all of them are penny stock companies.

None of the Item 4.01 8-Ks disclosing the departure of Terry L. Johnson offer much in the way of an explanation. One former client, Baltia Air Lines, noted that Mr. Johnson resigned for “personal reasons”. (Baltia, an OTC company, has changed its auditor seven times since 2009, including two terms of Patrick Rodgers CPA.) From the PCAOB website, it appears that Terry L Johnson’s registration was withdrawn in July 2015, which would mean that the firm would not be able to audit SEC registrants.

There’s usually something interesting going on with these smaller reporting companies!