M&A Propels BDO to the Top in Q3

BDO USA once again took the top spot among major firms in our quarterly ranking of new Securities and Exchange Commission audit clients, this time with a whopping 36 net new clients - the result, largely, of a number of major mergers the firm completed over the summer.

In late June, the Chicago-based firm, which ranks No. 8 on Accounting Today's Top 100 Firms list, announced three major additions, bringing on board Alaska-based Mikunda, Cottrell & Co., Minneapolis-based Moquist Thorvilson Kaufmann LLC, and a number of members of the banking practice of Northeast Top 100 Firm ParenteBeard. The mergers, which were all effective July 1, were expected to bring the firm to around $800 million in revenue, and also gave it a huge bump in SEC clients. The group from ParenteBeard brought in over 20 new clients alone.

Among the other major firms (see "Q3 2013 Client Gains & Losses"), Deloitte, Marcum and BKD all followed up BDO, with two net SEC clients each. Deloitte did, however, grab a few high-profile clients, including telecommunications company Sprint (with a market cap of over $17 billion), video game retailer GameStop Corp. ($2.8 billion), and ham purveyor Smithfield Foods ($3.5 billion) -- the last as a result of its acquisition by a Chinese company, Shuanghui International Holdings. Those all helped push Deloitte to the top of the charts of firms ranked by market cap audited, by assets audited, and by audit fees (see "New Client Leaders").

Other big grabs during the quarter included PwC signing up payroll company Paychex Inc. (with a market cap of $13.5 billion), and KPMG picking up clothing and housewares retailer Stein Mart Inc. ($1.2 billion).

BEYOND THE BIG FIRMS

BDO's acquisitions certainly helped push it to the top of this quarter's rankings, but M&A also played a role in shaping our ranking of audit firms by overall new clients (see "Overall Engagement Leaders"). Top 100 Firm Eide Bailly's merger with Salt Lake City-based Hansen, Barnett & Maxwell helped make it No. 3 on the list, while Newport Beach, Calif.-based Anton & Chia got a boost from merging in Irvine-based Cacciamatta Accountancy Corp. in August.

At the same time, though, both Pennsylvania-based KLJ & Associates and Salt Lake City-based Sadler Gibb & Associates benefited from a rush of new engagements after Alameda, Calif., auditor Sam Kan & Co. began telling clients that it would no longer serve public companies.