The Big 4 Could Use Some Auditing Lessons From Cohen & Co.

Posted on by Jason Bramwell

If Cleveland-based public accounting firm Cohen & Co. were an English Premier League goalkeeper, the firm would have gotten a clean sheet. Or if you’re not a fan of European soccer but like the NHL, Cohen & Co. would be like a goalie who finished the game with a shutout.

In its 2019 PCAOB inspection report, Cohen—the 49th largest CPA firm in the nation in terms of revenue according to INSIDE Public Accounting—aced all nine of its audits that were reviewed by inspectors during the 2018 inspection cycle.

Now some of you will say that Cohen did so well because its sample size was much smaller than the 58 audits of Deloitte’s that were inspected or the 26 of BDO USA’s that were reviewed by inspectors. But it doesn’t matter if a goalie stops nine out of nine shots, 26 out of 26 shots, or 58 out of 58 shots during a game—it still goes down on the stat sheet as a clean sheet/shutout.

And Cohen’s audit quality success isn’t a fluke. According to the firm’s last three PCAOB inspection reports, the firm only screwed up ONE of the 24 total audits inspected, for a failure rate of 4%.

All hail your undisputed overlords of audit quality. Here is Cohen’s unblemished 2019 PCAOB inspection report:

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Crowe Horwath Was the Big Audit Client Winner in 2009; E&Y, Deloitte Big Losers

We might be a little late to the party on this but it just recently came across our desk and since trying to get a post up today is akin to turning water into wine, we’re running with it. And, frankly, if a large portion of you regularly read the “Public Accounting Report” we’ll be blown (BLOWN!) away.

The determination of the ranking isn’t entirely clear to us so we’ll just go for some superficial analysis on Crowe Horwath (#1 on the list) and the Big 4:

• Crowe Horwath #1 – Net gain of 24 clients; net gain in audited revenue of approximately $4 billion; net gain in assets audited of $18.4 billion; net revenue to the firm of $11 million.

• PwC #2 – Net loss of 8 clients; net gain in audited revenue of $34.9 billion; net gain in assets audited of $2.68 billion; net revenue to the firm of $8.4 million.

• KPMG #5 – Net loss of 1 client; net gain in audited revenue of over $12.9 billion; net loss in assets audited of $61.4 billion; net loss in revenue to the firm of $19.5 million.

• Ernst & Young #9 – Net loss of 30 clients; net gain in audited revenue of $5.3 billion; net loss in assets audited of $53.8 billion; net loss in revenue to the firm of $36.7 million.

• Deloitte #10 – Net loss of 7 clients; net loss in audited revenue of over $90.5 billion; net loss in assets audited of $718 billion; net loss in revenue to the firm of $74.7 million.


Crowe Horwath’s net gain of 24 clients is easily the highest of the firms presented and they’re the only firm that has increases in all the categories presented. Kinda makes you wonder why they had such a steady stream of layoffs in 2009. We’re open to suggestions and wild-ass theories on this topic.

On the losing end, Deloitte’s loss of huge clients due to the financial apocalypse has been noted by our contributor Francine McKenna and is noted by the PAR:

The firm landed the most wins of any of the Big Four firms for 2009, 46, garnering 3.5% of the overall SEC audit wins for the year. Overall, the Big Four won 7.5% of the auditor changes reported during the first three months of 2005. What relegated the firm to last place in the standings was two huge loses: UAL, to E&Y, and Merril Lynch’s acquisition by Bank of America.

All that added up to nearly $75 million in lost audit fee revenue for Deloitte. In terms of the number clients lost, E&Y managed to cruise to that title with net loss of 30 clients:

E&Y captured some sizable wins for the year, notably UAL/Chicago (Revenue: $20.19 billion) from Deloitte and Apple/Cupertino, Calif. (Revenue $32.48 billion) from KPMG. But its gains couldn’t offset losses for the year of Tyson, Sovereign Bancorp and Nalco Holding, to name a few notable losses.

The end result of this client musical chairs doesn’t really add up to much in terms of revenue for any of the firms. Even the $75 million lost by Deloitte is a drop in the bucket compared to their fiscal year ’09 revenue of $26.1 billion.

Peruse as you numbers see fit and feel free to wave the flag.

3 thoughts on “The Big 4 Could Use Some Auditing Lessons From Cohen & Co.”

  1. The PCAOB does not hold non-Big 4 firms to the same standards as they hold Big 4 firms. Not to say that this isn’t impressive, but more to point out how truly awful BDO must be at auditing.

  2. A few things to keep in mind.

    1. Zero of the audits inspected were ICFR audits. Take out ICFR audits, and the deficiencies identified in other inspection reports would go way down.

    2. Their client base are much smaller companies with a lot less complexity to them. Now while it’s true that smaller clients typically have crappier accounting staffs and make the audits harder on the staff, they are a lot easier to audit from an issues perspective.

    I know the article is just trolling, but it’s really stupid to compare the Big 4 results to a firm like Cohen, as the audits inspected are not similar in the least.

  3. The audits conduct by Cohn are fund audits which do not issue an opinion on controls. It’s like comparing apples and oranges. This article is very misleading and not close to accurate.

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