Second-tier national accounting firms, particularly BDO, had a great 2014 — at the expense of most of the Big Four, according to Audit Analytics’ Auditor Changes Roundup: 2014 Annual Summary.
BDO, a Global Six firm, won 54 new clients compared to 14 losses, for a net increase of 40 engagements in 2014, to go along with a net increase of 57 last year, the report said. While BDO’s growth in 2013 was largely due to acquisitions, 2014 saw more organic growth.
“Organically, we added 39, and by expansions we added 15, so even if you back out the expansion-related additions, we would have comfortably maintained our position,” BDO chief executive officer Wayne Berson told Accounting Today.
Other firms posting strong wins last year were KPMG and Marcum, each with a net gain of 15 clients; and Grant Thornton, with a net gain of 12.
Those who suffered the heaviest losses were Ernst and Young, losing 65 total clients against a gain of 22, for a net loss of 43; and PwC, losing a total of 49 clients against 21 wins, for a net loss of 28. “But client wins and losses don’t quite tell the whole picture,” Audit Analytics wrote.
“Deloitte, for example, may have lost a net of eight clients, but their net increase in audit fees was $27.6 million. In other words, the clients that they won brought in significantly more fees than those they lost assuming the fees [remained] relatively constant.” (Click on chart for a larger image.)
However, BDO came out ahead in both measurements, with a net increase in audit fees of about $36.2 million, followed by KPMG’s $35.7 million; Deloitte; and Grant Thornton’s $13.5 million.