Deloitte and Grant Thornton each had net increases in new public company audit clients in 2021, but all but one of the other Big Four and global and national firms experienced net decreases or no change, according to the latest annual study.
In Audit Analytics’ 2021 summary of auditor changes reported in Securities and Exchange Commission filings, Deloitte ranked first among Big Four audit firms in total new SEC engagements (33). Deloitte’s net gain (13) led the Big Four and was an improvement from last year’s gain (six), continuing its run of seven straight years achieving net positive results.
EY, PwC, and KPMG experienced net client losses of two, nine, and 14, respectively.
The top spot for all firms for new SEC audit clients in 2021 went to Colorado-based BF Borgers, gaining 39 and netting 25.
For the Big Four and major global and national firms, there were 178 new engagements and 265 departures. This was the first time total client losses for all firms exceeded new client engagements since 2016, driven by Marcum’s loss of 110 clients, according to Audit Analytics.
Of Deloitte’s new audit clients, 21 came from the Big Four, five from other global and national firms, and seven from regional and local firms. Deloitte led in net gains in large accelerated filers (10) for a fifth consecutive year and had a net gain of two accelerated filers.
Deloitte and Grant Thornton ranked first and second in net audit fees won at $96.1 million and $30.5 million, respectively.
EY experienced a net client loss in 2021, after leading the Big Four in net client gains last year (10). It gained nine clients from and lost 11 to other Big Four firms and had offsetting gains and losses from all other size firms. EY had net losses in large accelerated (one) and accelerated filers (three).
PwC’s net loss consisted of 10 gains and 19 losses. Of its losses, 14 went to other Big Four firms and four to other global and national firms.
KPMG’s net loss of 14 was the highest of all Big Four and global and national firms except Marcum. It resulted from 18 gains and 32 losses, including net losses of large accelerated filers (three) and accelerated filers (five). KPMG lost 20 clients to other Big Four firms, eight to global and national firms, and four to regional and local firms.
EY, PwC, and KPMG each dropped out of the top five firms for net audit fees won compared to 2020.
Global and national firm results
Grant Thornton led all second-tier firms in new engagements (29). Of those, 19 came from the Big Four, three from other global and national firms, and seven from regional and local firms. Grant Thornton’s net gain (18) was the highest of all large firms, primarily from accelerated filers (eight). It led in this category for the second consecutive year.
Marcum experienced the highest net client loss (90) in 2021. The firm is a leader in special purpose acquisition company audits, which are frequently single-year audits because the new public company usually engages the operating company’s auditor once the SPAC completes a merger or acquisition.
Marcum, which gained 20 clients but lost 110, was also prohibited by the Public Company Accounting Oversight Board from auditing clients in China for three years, effective September 2020.
BDO’s net loss of five in 2021 was an improvement from losing 13 in 2020. It gained 17 clients but lost 22, with a net four lost going to the Big Four.
BKD was the only second-tier firm other than Grant Thornton that had net increases in new clients, gaining nine and losing one. It had a net gain in accelerated filers of five.
Other firm results
Cherry Bekaert finished third in the top five for net audit fees won at $4.9 million, although it only had a net gain of four clients.
Audit Alliance in Singapore was fourth in net audit fees won at $3.8 million, gaining 13 new nonaccelerated filer clients and losing two.
WithumSmith and Brown also experienced a significant number of net client losses because of SPAC clients, with a decrease of 74 and an increase of 15 nonaccelerated filers.