As we noted in a past analysis, the audit firm market has a very different landscape depending on whether you are surveying large or small public companies. When it comes to the largest public companies, the Big Four dominate the market.
When looking at smaller reporting companies, however, the Big Four do not even make it into the top 10. In fact, only two of the Big Four firms hold more than 1% of the market share in a population of just about 3,000 companies. Two other global firms – BDO USA and Grant Thornton – hold the third and sixth largest amounts of auditor market share, respectively, for smaller reporting companies.
Altogether, the Global Six (i.e., the Big Four, BDO, and Grant) audit less than 10% of smaller reporting companies. Whereas, among larger public companies, the same Global Six audit about 90% of the total market.
The top six firms in this market segment – which include BDO and Grant, but not the Big Four – provide audit services to just under 25% of these smaller companies. The remaining 75% of the market segment – over 2,000 companies – is split among 343 different audit firms. This is vastly different from the 97 audit firms other than the Big Four, BDO, and Grant Thornton who provide audit services to only 11.1% of larger public companies.
The infographic below offers a visual representation of the audit firms competing for market share among smaller reporting companies. Only one firm, MaloneBailey (which specializes in providing audit services to smaller public companies, according to their website), holds more than 4% of the auditor market share for smaller reporting companies.
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