EY holds lead in public company audits

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Big Four firm Ernst & Young maintains its top spot in the rankings of auditors of public companies, with over 250 public company clients more than its nearest rival, according to a recent study.

In Audit Analytics’ Who Audits Public Companies – 2017 Edition, which was just completed, EY totaled 947 public companies, followed by fellow Big Four firms PwC, KPMG and Deloitte & Touche with 696, 665 and 642, respectively.

Overall, billion-dollar firms continue to dominate the public company audit market, with BDO USA, Grant Thornton and RSM joining the Big Four account for just over half, or 51.2 percent of audits in the space. With the rest of the Top 10 leading public company auditors – MaloneBailey, Marcum and Crowe Horwath – they account for 61.7 percent of all public companies, which was up somewhat from last year, when the Top 10 accounted for 60.7 percent.

Most of the Top 10 held onto the same positions as last year; the only change in rankings was the addition of Crowe Horwath at No. 10, replacing last year’s No. 10, Anton & Chia.

The Top 10 firms handled 3,985 public audits, out of a total universe of 6,460 public companies.

In most sub-categories of public company audits, the billion-dollar firms dominate the running – they audit 96.5 percent of large accelerated filers, for instance, 71.4 percent of accelerated filers, and 69.6 percent of non-accelerated filers. All of those figures are all within a few percentage points of last year’s rankings.

The only area where large firms cede dominance is among smaller reporting companies, where only three billion-dollar firms – BDO, RSM and Grant Thornton – appear among the top nine. Texas-based MaloneBailey tops the rankings here, with 163 smaller reporting company clients (out of its total 168 public company clients), followed by BDO with 103.
Smaller reporting companies make up the largest portion of the public audit market, at 40 percent of public companies, followed by large accelerated filers, at 30 percent.

Interestingly, the number of public company clients declined from last year, according to Audit Analytics. The 2016 report covered 6,935 public companies requiring audits, while the 2017 report covers 6,460. The decline was particularly noticeable among smaller reporting companies, which dropped 11.8 percent from 2,948 companies last year, to 2,599 this year.
Data 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.

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