August 19, 2022

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

Are y’all ready for the results of the third auditor round-and-round of 2021? OK. Here we go.

It was another big quarter for BF Borgers, which added the most new SEC clients with nine while losing one for a net of eight, according to Audit Analytics’ third quarter audit gains and losses analysis. BF Borgers was also the big winner in Q2, netting nine new audit clients.

While total new clients in Q3 was the largest since the start of 2020, there was a drop among the 12 major global and national accounting firms that have the most SEC-registered companies as audit clients—38 down from 50 in Q2. There also was a small increase in client departures, from 66 in the second quarter to 68 in the third quarter, according to Audit Analytics.

Of those Dirty Dozen, Deloitte and Grant Thornton tied with netting the most new engagements with four. But while Deloitte lost two engagements (one to Grant Thornton and one to Marcum), GT didn’t lose any in Q3. Other firms on the plus side of the ledger were PwC (1), BDO USA (1), RSM US (1), and BKD (1).

The biggest loser in the game of auditor musical chairs was once again Marcum (net -35), which also lost the most audit clients in Q2 (net -16) and Q1 (net -15), according to Audit Analytics. Incompetence? No. SPACs? Yes.

As mentioned in our Q4 2020Q1 2021, and Q2 2021 analyses, Withum and Marcum continued to see a large number of departures due to finalized acquisitions of SPAC clients; this trend has continued into Q3 of 2021. However, it is not uncommon for SPACs to change their auditor once an acquisition has been completed.

The Big 4 firm with the worst Q3 was EY, which lost nine clients and only gained three for a net -6. I don’t know what’s worse: losing an engagement to a Big 4 rival or losing an engagement to a smaller national accounting firm? Well, both happened to EY: three went to Deloitte, one to KPMG, two to BDO, one to Grant Thornton, one to BKD, and one to an unnamed regional or local firm. Here’s a chart from Audit Analytics showing all the client gains and losses in Q3:

Grant Thornton led in net audit fees won in Q3 with $4.8 million, followed by Deloitte with $3.1 million.

Auditor Changes Roundup: Q3 2021 [Audit Analytics]

Related articles:

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

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