Marcum led the way this quarter in new SEC audit clients with a net of 19 new engagements in Q3 2022. Marcum gained 34 clients this quarter, 29 of which came from firm mergers. As mentioned in Accounting Today, 25 of Marcum’s new clients came from its September 1 merger with Top 100 firm, Friedman. The audit firm Rotenberg Meril Solomon Bertiger & Guttilla also completed a merger with Marcum in February 2022. The transition progressed during the current quarter, resulting in another four new clients for Marcum.
Overall, the Big 4 and global & national firms gained 72 and lost 69 clients during Q3 2022. Both departures and engagements increased from the previous quarter.
The table below presents a complete view of the gains and losses of the major global and national firms. It shows the number of SEC audit clients that each auditor gained or lost. Additionally, it shows the auditor from or to which the client was won or lost.
Of the Big 4 firms, KPMG was the only firm to see a net increase in clients, gaining five and losing four in the quarter. Deloitte gained six and lost seven, while PwC gained four and lost six. EY had the least net engagements this quarter with two new client gains and six losses overall.
Among the other eight global & national firms, five experienced positive net engagements in the quarter. Marcum led this group with 19 net engagements, due in large part to the firm mergers mentioned above. RSM, Grant Thornton, and Crowe all gained a net of two clients. FORVIS, a new firm created from a merger between BKD and Dixon Hughes Goodman in June 2022, gained three and lost two clients in the quarter for a net of one.
BDO lost 17 clients in Q3 2022 after losing 15 clients in Q2 2022. Collectively, in the past two quarters, the firm has gained a total of six clients. EisnerAmper and Moss Adams also saw net decreases in Q3, losing one client each.
Large Accelerated Filer Auditor Changes
In these tables below, we broke down the auditor changes by the size of companies gained or lost. These changes are 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 2022, three firms saw a positive net gain in Large Accelerated clients. Deloitte led the way with two net gains. PwC and Grassi & Co CPAs followed with one engagement each.
Marcum broke even, gaining one and losing one Large Accelerated client in the quarter. Crowe, Friedman, and BDO all lost one client in this category while EY lost two.
Accelerated Filer Auditor Changes
The next table shows a sample of the largest wins and losses for Accelerated Filers. Accelerated Filers are companies with a public float between $75 million and $700 million. Companies that identify as an Accelerated Filer + Smaller Reporting Company are subject to Accelerated Filer requirements. These requirements include an auditor’s attestation of management’s assessment of internal control over financial reporting. As a result, we’ve included these companies in the analysis for Accelerated Filers.
Audit firms broke even this quarter among Accelerated Filer clients, both gaining and losing 21 clients overall.
Crowe and RSM saw the most gains among Accelerated Filers this quarter, gaining three new clients each. Ten other firms followed with one engagement each.
Eleven firms experienced net losses in this filer category. BDO lead accelerated filer departures with five losses and two engagements, for a net loss of three clients.
Non-Accelerated Filer and Smaller Reporting Company Auditor Changes
The last table shows the top gains and losses for Smaller Reporting Companies. This population has a mix of companies that did not identify as Large Accelerated Filers, Accelerated Filers, or Accelerated + Smaller Reporting Company. For a list that is divided by all separate filer statuses, please contact us.
Marcum led the way during Q3 2022 for Non-Accelerated and Smaller Reporting Companies with 20 net clients. Of their 32 engagements, 27 came from firm mergers. Baker Tilly took a distant second with a net of five clients, followed by M&K CPAs with four.
Friedman lost 26 clients this quarter, 23 of which were a result of their merger with Marcum. As in Q2, BDO lost ten Non-Accelerated and Smaller Reporting Company clients this quarter.
In total, there were 125 engagements and 148 departures for a net loss of 23 Non-Accelerated and Smaller Reporting Company clients this quarter.
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