BDO USA took the top spot in the league tables for large-firm gains of Securities and Exchange Commission audit clients in the second quarter of 2013. The Chicago-based firm, which ranks No. 8 on Accounting Today’s Top 100 Firms list, added a net nine new firms, far ahead of most other firms for the period.
Among BDO’s big gains were sneaker maker Skechers USA, with a market cap just under $1 billion, and oil and gas exploration and production concern Magnum Hunter Resources, with a market cap of $675 million.
McGladrey came in second with five net new client engagements. Among the Big Four firms, Deloitte did the best with a single net new client; the other three all recorded net losses of SEC clients, with Ernst & Young bringing up the rear with a net loss of 17 engagements. (See the gains and losses for large firms.)
Low gains or net losses don’t mean that firms didn’t see new engagements, however. Deloitte, for instance, actually had 11 new engagements -- they were just nearly balanced by 10 departures. Among its significant new clients was casino operator Las Vegas Sands Corp., with a market cap of $38 billion. Deloitte also topped our list of new client engagements by total market cap audited, at $42 billion. And though PricewaterhouseCoopers ended the quarter down two SEC clients, the six that it gained propelled it to the top of the list of new clients by total assets audited (in large part thanks to its engagement by investment bank and securities firm Jefferies Group), and new clients by total audit fees. Deloitte took the second spot in both of those lists.
Beyond the big firms
In many cases, our list of overall engagement leaders is often significantly affected by firm re-organizations or mergers. Unusually, the firm in the top spot this quarter, Florida-based Messineo & Co., is the result of a de-merger, according to filings by clients: In April, owner Peter Messineo reportedly left DKM CPAs, a firm he had helped create by merging his practice with Drake & Klein CPAs in late 2012.
Baker Tilly Virchow Krause, meanwhile, was helped to its No. 3 spot on the overall list by its recent union with Top 100 Firm Holtz Rubenstein Reminick. The merger with the $33 million firm, which was announced in April and took effect June 1, is expected to propel Baker Tilly to over $300 million in annual revenue -- and added a significant number of new SEC clients to its roster this quarter. Similarly, major Canadian firm MNP owes many of this quarter’s new clients to its merger with Toronto-area firm MSCM, which was announced in May and became effective June 1.
Houston-based MaloneBailey, though, drew in its 16 new SEC audit clients, all of whom are smaller reporting companies, from a wide variety of previous auditors
Finally, in a statistic that can have a number of interpretations, both positive and negative, but that’s worth noting either way: The total number of auditor changes for the second quarter of 2013 was up more than 80 percent over the same period in 2012 -- 281 versus 153.
Note: As a sharp-eyed reader has pointed out in the comments, some of the large-firm changes don't "foot out" -- often, this is because companies will report leaving an auditor in one quarter, but not report their new auditor until the next quarter.
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