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February 5, 2023

EY Remains the Most Audit-y of the Public Company Auditors

Congrats to EY for once again having more public company audit clients than any other Big 4 firm.

Of the 6,167 public registrants in the United States, EY audits 921 of them, or 14.9%, according to Audit Analytics’ Who Audits Public Companies – 2018 Edition. PwC is next with 658 public company audits, or 10.7%; Deloitte & Touche with 640, or 10.4%, and KPMG with 631, or 10.2%.

EY also has held the top spot in public company audit engagements the past two years. According to last year’s analysis from Audit Analytics, EY performed 947 audits, followed by PwC with 696, KPMG with 665, and Deloitte & Touche with 642.

The 2016 edition revealed that EY performed 994 public company audits, followed by PwC with 717, KPMG with 692, and Deloitte & Touche with 664.

It’s also interesting to note that the public company population in the United States is dwindling like LeBron’s chances of winning an NBA title this year. The number of entities fell from 6,460 in 2017 to 6,167 in 2018, a 4.5% decrease.

According to a blog Audit Analytics posted last year, the research firm found that there were 5,243 fewer 1934 Act filers in 2015 than in 2000, a 39% decrease. Audit Analytics wrote:

[N]ot only is the overall trend on the decline, but in 14 of the 15 years under review, deregistrations have exceeded the number of registrations. Many different explanations for this behavior have been conceived. Some point to regulation as the cause, citing increased disclosure demands from SOX 404, or the 2012 JOBS Act provision that increased the SEC reporting thresholds from 500 shareholders to 2,000. Other explanations include some combination of upward trends in merger and acquisition activity, a slowdown in the IPO environment, and a growing preference for acquiring capital through private debt rather than through public equity.

And this from Tammy Whitehouse of Compliance Week:

Jay Clayton, chairman of the Securities and Exchange Commission, has bemoaned the continued decline in the number of public companies, indicating capital formation to be an important objective during his tenure. The SEC has taken steps to make it easier for companies to pursue initial public offerings and has signaled it will get away from the “broken windows” approach to enforcement.

According to Audit Analytics’ 2018 analysis, the population of smaller reporting companies dropped by 179 from the previous year, non-accelerated filers decreased by 66, and accelerated filers dropped by 64. However, large accelerated filers grew in population by 14 from the prior year.

The six largest firms—Big 4, Grant Thornton, and BDO USA—audited 95.8% of large accelerated filers, with EY leading the way at 28.3%, according to Audit Analytics’ 2018 analysis.

[Audit Analytics]

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