Auditor Changes Roundup: Q3 2020

Cohen & Company, Grant Thornton, and Marcum, each with a net of three new SEC audit clients, account for the most SEC audit clients gained among all firms in Q3 2020. As mentioned in Accounting Today, EY had the most new engagements during the quarter with six, but netted fewer SEC clients.

In terms of new client engagements in Q3 2020, EY’s six engagements was the highest of any firm. Second place for most new engagements during the quarter was a tie between BF Borgers and Deloitte, each with five.

As seen in the matrix below, there were 33 new engagements and 38 departures during Q3 2020 among the major global and national firms. This is a decrease in SEC-client auditor change activity from Q2 2020’s 51 engagements and 62 departures, and is commensurate with Q3 2019’s 38 engagements and 33 departures.

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 won or lost.

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Leading the way among the Big Four audit firms, EY gained six new SEC clients in Q3 2020, but lost six clients during the quarter. Deloitte came in second in terms of new engagements with five, and lost three, for a net of two new clients. PwC and KPMG gained four and three new clients, respectively.

Among the other global & national firms, four firms had a positive net engagement of audit clients this quarter: Grant Thornton (three clients), Marcum (three clients), RSM (two clients), and EisnerAmper (one client).

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.

In Q3 2020, Deloitte gained three new Large Accelerated Filer clients. PwC had one net engagement for Large Accelerated Filers during the quarter.

Among Large Accelerated Filers in Q3 2020, there were six audit firm engagements and seven departures.

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.

Three firms each had a net of two Accelerated Filers during Q3 2020: Grant Thornton, Marcum, and RSM. For Accelerated Filers, six firms each netted one new audit client: EY, Deloitte, Akin Doherty Klein & Feuge, Horne, Mayer Hoffman McCann, and Plante & Moran.

Among Accelerated Filers in Q3 2020, there were 17 audit firm engagements and 20 departures.

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.

During Q3 2020, there were nine firms that each gained a net of two Non-Accelerated Filers and/or Smaller Reporting Companies; there were 24 firms that each gained a net of one new SEC audit clients with one of these filer statuses.

In total, for Non-Accelerated Filers and/or Smaller Reporting Companies during Q3 2020, there were 63 engagements and 62 departures.

This analysis was created using the Auditor Changes database, powered by Audit Analytics.

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

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