Auditing

Grant Thornton Signing Big Four Clients

In 2004 alone, according to the audit firm, it picked up more than 1,000 new engagements from clients of the Big Four.
Stephen TaubFebruary 14, 2005

The New York Times recently pointed out that the Big Four accounting firms are shedding clients at almost three times the rate they did in 2002, the year that the Sarbanes-Oxley Act took effect. Citing data from research firm Audit Analytics, the Times added that most of the companies being dropped are either small companies or those judged too risky to work with under the new accounting rules.

Grant Thornton LLP and other smaller national firms may have picked up the slack in 2004 just as they did a year earlier. Grant Thornton announced that last year alone, it picked up more than 1,000 new engagements from clients of the Big Four audit firms.

The nation’s fifth-largest audit firm stressed that in most cases, the engagements were actively pursued by one or more of the Big Four. In addition, of these more than 1,000 new engagements, the Big Four firm resigned from the client in only 23 cases; the rest of the time, according to Grant Thornton, the change was the client’s idea.

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These new engagements are for audit, tax, and consulting work, according to a Grant Thornton spokeswoman. She wouldn’t give specifics on the size of the new clients, but very likely they are smaller companies. Grant Thornton ranks highest among firms managing clients with less than $1 billion in revenue, according to a study of audit firm performance published last November by J.D. Power and Associates. The study was based on interviews with 1,007 audit committee chairs and 944 chief financial officers.

According to Grant Thornton, the firm resigned a higher percentage of public-company audits than any other firm, and as a percentage of departures it was dismissed as auditor relatively fewer times than any other firm.