Who Audits Public Companies – 2019 Edition

Since last year’s analysis, the population of SEC registrants decreased by 3%, from 6,167 registrants in 2018 to 5,973 in 2019.

The top 10 firms by registrant count (EY, PwC, Deloitte, KPMG, BDO, Grant Thornton, Marcum1, RSM, MaloneBailey, and Crowe) increased their combined market share by 1% since last year. Together, these ten firms audit over 63% (3,810) of the 5,973 public registrants.

While the top 10 firms have remained the same as last year, we are seeing changes to how registrants are identifying their filing status, but it seems that recent SEC reporting amendments can help explain some of the changes.

With an intent “to promote capital formation and reduce compliance costs for smaller companies while maintaining appropriate investor protections”, the SEC has expanded the scope of Smaller Reporting Companies, allowing companies to identify as a Smaller Reporting Company, or both a Smaller Reporting Company and either an Accelerated or Non-Accelerated Filer.

These new amendments increase the number of eligible Smaller Reporting Companies without changing the “accelerated filer” threshold, which requires an auditor’s attestation of management’s assessment of internal control over financial reporting.

Our methodology is to give Accelerated Filer status precedent for companies that select both Accelerated Filer and Smaller Reporting company, as these companies “remain subject to the requirements that apply to accelerated filers”.

With 573 public company audits, EY audits 28% of Large Accelerated Filers. The vast majority of Large Accelerated Filers – almost 90% – are audited by the Big Four.

The Big Four, together with BDO and Grant Thornton, audit the greatest number of Accelerated Filers, accounting for over 66%. The remaining 391 companies were audited by 82 other firms.

For this analysis, we combined the remaining companies that did not identify as either a Large Accelerated or Accelerated Filer. The top 20 firms collectively audit 51% of this population of Non-Accelerated and/or Smaller Reporting Companies. Marcum audits the largest share of this population with 156 companies, or 6%. The remaining 49% of these companies is shared among 264 other auditors.

For more information on this analysis or auditor market share in general, please contact us by emailing info@auditanalytics.com or call 508-476-7007.

1. Marcum counts include Marcum Bernstein & Pinchuk