Deloitte, Prager Metis top the charts in 2019 SEC audit clients

While mergers were a major factor in bringing on new Securities and Exchange Commission clients in 2019, they were not a universal one: Of the two firms that led in terms of new clients last year, one got almost all of its new engagements through M&A — and one added none through combinations.

Big Four firm Deloitte & Touche led the ranking, adding 37 new clients in 2019 and netting 26, with exactly none coming through M&A. (See “2019 Clients Gains & Losses,”) Top 100 Firm Prager Metis, on the other hand, added 28 new clients and netted 21, with 25 of the former from mergers. Nineteen came from its February 2019 merger with Las Vegas-based AMC Auditing, and six from its July merger with MJF & Associates. (See “Net Engagement Leaders.”)

Deloitte’s strong performance carried over into new large accelerated filers, where it brought on 15 new clients and netted 13; Grant Thornton came second in that category, adding four and netting two, but it topped the list of new accelerated filer clients for 2019, adding five and netting four. (See “Audit leaders.”)

Prager Metis topped the charts in terms of net non-accelerated files and smaller reporting companies, adding nine and netting seven; Top 100 Firms Friedman and Marcum actually added more, with 10 and 16, respectively, but netted fewer.

Interestingly, Deloitte was a runner-up in terms of new market capitalization audited and new audit fees; Ernst & Young topped the lists in those categories. It added $39.6 billion in new market cap audited (with $17.64 billion from San Francisco-based payment-processing solutions developer Square Inc. and $4.9 billion from Kirkland, Wash.-based power circuit manufacturer Monolithic Power Systems as the notable contributors) and $46.2 million in new audit fees (Square added $4.48 million, but the standout was the $13 million from car rental giant Hertz Global Holdings.) Deloitte came second in both categories; it had over 10 new clients with market capitalizations between $1 billion and $2 billion, and five clients paying audit fees of between $3 million and $4 million, but none of them stood out as major contributors. (See "New Client Leaders.")

The other two members of the Big Four added the largest amounts of new assets audited. PricewaterhouseCoopers had $153.2 billion in new assets, with the biggest chunks coming from Pennsylvania-based investment fund Hartford Mutual Funds, with $79.16 billion, and from Houston-based investment vehicle Short-Term Investments Trust, with $50.84 billion. KPMG took second, with $92.2 billion overall; almost all of that — $89.9 billion — came from Jefferson, Alabama-based life insurer Protective Life Corp.

Mergers matter

As it did in 2018, M&A had a major impact on how many new audit clients firms were able to bring on. Besides Prager Metis, a number of the leading firms boosted their totals through mergers, including:

• Florida-based Assurance Dimensions added nine SEC clients from its acquisition of another Florida firm, Soles, Heyn & Co.
• Top 100 Firm Eide Bailly brought on six new clients from its July merger with California-based Top 100 Firm Vavrinek, Trine, Day & Co.
• Top 100 Firm Wipfli got five new audit clients from its October merger with Atlanta-based Porter Keadle Moore.
• Top 100 Firm Baker Tilly added four clients after merging in Texas-based Top 100 Firm Montgomery Coscia Greilich in June.

Data for the rankings are provided by Audit Analytics, a premium online intelligence service delivering audit, regulatory and disclosure analysis. Reach them at (508) 476-7007, info@auditanalytics.com or www.auditanalytics.com.