Auditor Changes Roundup: Q4 2018

Plante & Moran, with a net of 33 new SEC audit clients, accounts for the largest number of new clients among all firms this quarter. Prager Metis followed with 26 new clients. 

The October 2018 merger between Plante & Moran and EKS&H, two large firms in their respective regions, accounts for the high number of engagements for Plante & Moran. The newly combined firm will be the eleventh largest in the country. As noted in Accounting Today, 30 of Plante & Moran’s engagements were a result of the merger with EKS&H.

Similarly, the 26 new engagements for Prager Metis can be attributed to the merger with Paritz & Company that occurred in October 2018.

Among the major global and national firms, BDO USA netted the largest number of new clients with four engagements and one departure, for a net of three new clients. Crowe also netted three new clients, with three engagements and no departures. Of the Big Four firms, Ernst & Young claimed the top spot with three engagements and two departures, for a net of one new client.

As seen in the matrix below, there were 27 new engagements and 27 departures during Q4 among the major global and national firms. This is a decrease from 57 engagements and 30 departures noted with these firms during Q3 2018.

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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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.

Crowe was the top firm for Large Accelerated Filers wins this quarter, with two new clients. BDO USA and RSM US followed, each netting one new Large Accelerated Filer this quarter, while Ernst & Young and PricewaterhouseCoopers each had one engagement and one departure.

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.

Plante & Moran led among Accelerated Filers, netting eight new clients with no departures. Seven of the Accelerated Filer wins for Plante & Moran came from EKS&H.

The next closest firm is Grant Thornton, with three engagements and no departures. Among Accelerated Filers, the five audit firms with positive net engagements had no departures.

The last table presents the top six gains and losses for Smaller Reporting Companies.

Plante & Moran is also the top audit firm by Smaller Reporting Companies wins, with a net of 14 new clients. All Smaller Reporting Company wins for Plante & Moran came from EKS&H.

Prager Metis and M&K round out the top three firms among this group, with a net of nine and six new clients, respectively.

As previously mentioned, the high number of losses among Smaller Reporting Companies for EKS&H and Paritz & Company this quarter can be attributed to audit firm mergers that occurred in October 2018.

For Smaller Reporting Companies in Q4 2018, there were 16 firms with a net gain of one client and 27 firms with a net loss of one client.

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