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Who Audits Mutual Funds – Regional Market Shares

Continuing our review of the audit market across mutual funds (’40 Act filers) at the series level, in this post, we analyze how location affects audit firm market share.

Mutual fund audits are more commonly conducted through east coast offices. Nearly 85% of fund audits are through Mid Atlantic, New England, or Midwest offices. More specifically, two-thirds of funds are audited by firms headquartered in just four cities:

As mentioned in a recent Accounting Today article, PricewaterhouseCoopers LLP (PwC) holds the largest share of fund audit clients in every region except the Midwest and the West, where they hold the second largest share in each. Fellow Big Four firm Deloitte leads in the West with just 2% more mutual fund clients than PwC, while regional firm Cohen & Company leads in the Midwest. Cohen & Company has specialized in the audits of mutual funds for many years.

The Southwest is the most homogeneous region, with over 80% of fund audits conducted by PwC and 98% conducted by either PwC or EY. The remaining 2% of the market is shared among six firms.

The Midwest is the most diverse region, as no single audit firm controls more than 30% of the Midwest market. However, the top five firms represent 99% of the market.  

While the fund market is dominated by the Big Four – specifically PwC – we can see that, in addition to Cohen & Company, some smaller firms have substantial market share in several regions. RSM is the third largest firm in the West with 7% of the market, while Tait Weller & Baker and BBD hold 8% and 6% of the Mid Atlantic market, respectively.

This analysis uses data from the Mutual Fund Auditor Engagements database, part of the new Funds + Securities module, powered by Audit Analytics.

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

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