Once again, Top 10 Firm BDO USA led large audit firms in new Securities and Exchange Commission audit clients, with 16 new engagements and a net gain of nine in the second quarter of 2015. And despite the firm’s high profile in the profession’s merger market, the vast majority of its gains were from other large firms, particularly the Big Four. (See “Q2 Client Gains & Losses.”)
Texas’ MaloneBailey, meanwhile, led the overall charts with 22 new engagements and whopping net gain of 18. Those numbers also gave it the lead in signing up smaller reporting companies, with a net three times its nearest competitor. (See “Net Engagement Leaders” and “Audit Leaders.”) Its new clients came from a wide range of previous auditors, both large and small.
Two other firms with major new engagement tallies were California-based Danielle Adams/Adams Advisory, which brought in 10 new clients from Terry L. Johnson, who is apparently no longer eligible to audit SEC-reporting companies, and Texas’ Gillespie & Associates, which also brought on 10 new clients. In its case, the clients came a predecessor firm, Harris & Gillespie, where Gillespie & Associates founder Michael Gillespie was an audit partner before H&G’s dissolution.
Deloitte also brought in 10 new clients, and while client losses meant that it only netted one, the size of those it gained put it at the top of the rankings for new market capitalization audited and new assets audited. Two real estate investment trusts, American Realty Capital Properties Inc. and Brixmor Property Group Inc., with market caps of $8.2 billion and $6.1 billion, respectively, and paint and coating manufacturer RPM International Inc., with a market cap of $5.7 billion, helped put it almost $20 billion ahead of its nearest competitor, KPMG. The same three clients accounted for $34 billion of Deloitte’s $41 billion in new assets audited (American Realty made up almost half of it). KPMG was second here as well, with $29 billion in new assets audited. (See “New Client Leaders.”)
Interestingly, Deloitte came in second in new audit fees, trailing KPMG by almost $20 million. Life insurance carrier Phoenix Companies accounted for the vast majority of KPMG’s $45 million in new audit fees; Phoenix’s fees are $33 million, and no other new client from the client brought in more than $3 million.
Data for the quarterly rankings are provided by Audit Analytics, a premium online intelligence service delivering audit, regulatory and disclosure analysis. Reach them at (508) 476-7007, firstname.lastname@example.org or www.auditanalytics.com.
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