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January 29, 2023

Which Big 4 Firm Was the Biggest Loser In the Third Auditor Shuffle of 2020?

Now that Accounting Today has published the most recent data from Audit Analytics on who won and who lost the game of auditor musical chairs in the third quarter, let’s take a look at which firm(s) resigned or were fired the most by clients and who the beneficiaries were.

All in all there were 33 new SEC audit client engagements and 38 departures in Q3 among the 12 major global or national audit firms between July 1 and Sept. 30, according to Audit Analytics, compared to 51 engagements and 62 departures in Q2.

Among the top 12, Grant Thornton and Marcum were the biggest winners, each picking up four new clients and losing one, for a net gain of three, according to Audit Analytics. Outside of the top 12, Cohen & Co. also had a net of three new SEC clients.

GT picked up two of those clients from Deloitte, and according to the website Big 4 By the Numbers, those clients were American Outdoor Brands Inc. and Century Casinos. B4BTN noted that Century Casinos bought in a total fee of $1.6 million in 2019 for Deloitte.

The Purple Rose of Chicago also picked up the engagement for Sportsman’s Warehouse Holdings Inc., which dismissed KPMG as its auditor in July, according to B4BTN.

Audit Analytics’ analysis shows that Marcum picked off one client each from EY, PwC, and KPMG. The one from KPMG was Global Eagle Entertainment Inc., which brought in $7 million in total fees last year, according to B4BTN.

Speaking of KPMG, it was another soul-crushing quarter for the House of Klynveld. In Q2, KPMG lost 13 audit clients while only gaining four, for a net of -9—the worst of any firm in the top 12. In Q3, KPMG also had a net client gains/losses of -9, losing 12 and winning three, which again was the worst among the top 12.

According to Audit Analytics, KPMG lost eight of those 12 clients to other Big 4 firms (four to PwC, three to EY, and one to Deloitte), and didn’t pick up a single client from any of them.

The next worst net gains/losses was BDO USA, which lost seven clients but won three for a total of -4.

Here’s a chart from Audit Analytics showing all the client gains and losses in Q3:

Auditor Changes Roundup: Q3 2020 [Audit Analytics]
Grant Thornton, Marcum tie for new Q3 audit clients [Accounting Today]

Related article:

Which Big 4 Firm Was the Biggest Loser In the Second Auditor Shuffle of 2020?

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