This is Audit Analytics’ annual market share analysis of auditor engagements at public companies. Using our Auditor Engagements data, it looks at who is currently conducting audits of SEC public registrants, based on reports filed with the SEC since March 2021.
The public company audit market is a competitive space. As of May 10, 2022, 252 firms conduct audits for 6,652 SEC registrants. This represents a 10.3% increase in population compared to last year’s market share analysis. The large jump in population can be attributed to the record high number of IPOs and SPACs flooding the market in 2021.
The top ten firms by registrant counts remain unchanged from last year: EY, Deloitte, PwC, KPMG, Marcum, Withum, Grant Thornton, BDO, BF Borgers and RSM. Together, these ten firms audit 68.8% of the population. This continues the upward trend for the top ten audit firms in terms of market concentration for SEC public registrants.
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When excluding approximately 700 SPACs, the top ten firms by registrant count changes.[1] SPACs have limited operations until they conduct a business combination. Therefore, audits of these entities, while requiring certain expertise, are less complex than the audits of operational public companies.
Without SPACs or blank check companies, the top ten firms consist of the Big Four, followed by Grant Thornton, BDO, Marcum, BF Borgers, RSM, and Crowe. Collectively, when SPACs are excluded, those firms audit 67.0% of the public company market. This mirrors the concentration seen with the top ten firms for the entire public company population, albeit with a slightly different roster of firms.
The methodology for this analysis gives large accelerated and accelerated filer statuses precedent over those companies that opted to identify as both large accelerated or accelerated + smaller reporting company. These companies, despite identifying as SRCs, remain subject to the more stringent requirements that apply to accelerated filers.
Large Accelerated Filer Market
With 632 company audits, EY audits 28.4% of large accelerated filers, including companies that identified as both a large accelerated filer and SRC. In fact, the Big Four firms audit the vast majority – 88% – of large accelerated filers.
Outside of the Big Four, there are 36 other firms that compete for the remaining 12% of the large accelerated filer registrant market.
Since last year’s analysis, the population of Large Accelerated filers increased by 17.2%.
Accelerated Filer Market
The Big Four, together with Grant Thornton and BDO, audit the greatest number of accelerated filers. This number includes companies that identify as both an accelerated filer and SRC, accounting for over 68% of the market. 61 other firms audit the remaining 204 companies.
The population of Accelerated filers decreased 20.9% from last year.
Non-Accelerated Filer Market
The Big Four and Marcum account for 57.4% of the non-accelerated filer audit market. There are 57 other firms that share the remaining 42.6%.
The population of Non-Accelerated filers increased 22.4% from last year.
Smaller Reporting Company Market
The Big Four largely dominates the audit firm market share of large public companies. As a result, the audit firm market share of smaller public companies is more diverse.
There is significant competition among firms auditing smaller companies, with 697 SRC registrants audited by 184 firms.
Five firms hold the top 23% of the SRC audit market: BF Borgers, M&K CPAs, Boyle CPA, JP Centurion & Partners, and Accell Audit & Compliance. The remaining 77% of the market is audited by 149 other firms. Sixty-four firms each audit only one SRC.
The population of SRC filers decreased 28.0% from last year.
Non-Accelerated Filer and Smaller Reporting Company Market
Auditor market share for filers that identify as both non-accelerated and a smaller reporting company is similar to the other markets of small companies. The top six firms consist of Marcum, Withum, EY, BDO, BF Borgers, and Deloitte. Collectively, those firms audit 45.0% of the market. The remaining market is shared among 192 other firms.
This population increased 25.8% from last year.
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[1] For a complete analysis of audit firm market share excluding SPACs from the Who Audits Public Companies – 2022 Edition, access it here. The complete analysis incudes registrant counts and market share for the top firms and additionally segments the public company audit market by company size, stock market, industry, jurisdiction, and US location.