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February 8, 2023

Which Firm Was the Biggest Loser In the Second Auditor Shuffle of 2021?

The auditor round-and-round continued in the second quarter of 2021, with everyone’s favorite public accounting firm with a Lettuce Entertain You restaurant sounding name, BF Borgers, netting nine new SEC clients, the most of any audit firm, according to the Q2 auditor changes roundup from Audit Analytics.

And as Accounting Today noted in its post on Q2’s results, the other big winner was Denver-based Gries & Associates, which added seven SEC clients, five of which came from AJ Robbins CPA in Denver.

Of the 12 major global or national accounting firms that have the most SEC-registered companies as audit clients, the biggest winners were EY with six clients gained and one that left, for a net total of five, and, believe it or not, KPMG, often synonymous with getting dumped by its audit clients, which gained six and lost three for a net total of three.

And now for the biggest losers of Q2. Usually we’d be writing about KPMG in this portion of our quarterly recaps of audit clients gained and lost, but this time the Big 4 firm with the worst quarter was PwC, which got three new clients but saw five others leave for greener pastures (Deloitte got two of those five), for a net of -2. Deloitte also finished in the negative column in Q2, nabbing the two clients from PwC plus six more for a gain of eight but lost nine, finishing up net -1.

BDO USA also had a poor quarter with a net of -5. But the firm that hemorrhaged 21 clients and only gained five for a net of -16 in Q2 was Marcum. The House of Weiner was also the biggest loser in Q1, with a net of -15. But as we noted in our Q1 recap, the reason why Marcum has lost so many clients so far this year has to do with SPACs.

Audit Analytics said:

Withum and Marcum each saw a significant number of departures due to finalized acquisitions of SPAC clients; this trend has continued into Q2 of 2021. However, it is not uncommon for SPACs to change their auditor once an acquisition has been completed.

Those two firms have dominated the SPAC auditor market, accounting for 90.2% of all blank check IPOs from Jan. 1, 2019 to Sept. 30, 2020, with 156 companies raising more than $47.7 billion. During that period, Withum audited 89 SPACs and Marcum 68. In the “Non-Accelerated Filers and Smaller Reporting Companies” column, Withum won only two new engagements in Q2 while losing 14 for a net of -12.

Overall, there was a slight decrease in new client engagements among the top 12 audit firms, dropping from 56 in Q1 to 50 in Q2, according to Audit Analytics. There also was a slight decrease in client departures, dropping to 66 from the prior quarter’s 68 departures.

Here’s a chart from Audit Analytics showing all the client gains and losses in Q4:

Auditor Changes Roundup: Q2 2021 [Audit Analytics]
BF Borgers leads in new SEC clients for Q2 [Accounting Today]

Related article:

Which Firm Was the Biggest Loser In the First Auditor Shuffle of 2021?

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