Who Audits Public Companies

This report by Audit Analytics (Q2, 2023) presents an analysis of the auditor market share for companies registered with the United States Securities and Exchange Commission (SEC).

The data used in this research report was obtained from the Audit Analytics Auditor Engagements database, which compiles information based on auditor signatures from periodic reports filed with the SEC after March 1, 2022. The report focuses on the current auditor market share, categorising companies based on various criteria such as company size, market, jurisdiction, industry, and registrant type.  

The report includes data for all '33 & '34 Act filers with a filing requirement with the SEC. The population includes both domestic and foreign registrants, excluding companies with no engaged auditor or undisclosed filer statuses. Additionally, Special Purpose Acquisition Companies (SPACs) are 707 or 10% of the total population of 6,950 active registrants.  The report primarily presents data on registrants with operations (excluding SPACs).

Source: Audit Analytics

The report provides an overview of the auditor market share in terms of the top audit firms and their respective market shares. The Big Four firms (EY, Deloitte, PwC, and KPMG) dominate the market auditing 51% of all non-SPAC registrants (46% when SPACs are included), with EY leading in terms of market share of 16.0% with 1,002 non-SPAC clients (with 14.45% of the share when SPACs are included in the population). Grant Thornton follows at No. 5 with 272 clients and 4.3% market share when SPACs are excluded. Regional firms and other non-Big Four firms also have a significant presence in the market.  Marcum dominates the SPAC client audits with 286 registrants or 40% of the SPAC market.

Source: Audit Analytics

The report summary further highlights the market share based on company size for non-SPAC clients. Non-Accelerated Filers (NAFs) constitute the largest segment, followed by Large Accelerated Filers (LAFs), Accelerated Filers (AFs), and Smaller Reporting Companies (SRCs). EY and Deloitte are No. 1 and 2, respectively of the audit firms across the segments of LAF, AF and NAF.  Grant Thornton is No. 3 in the AF audits, excluding SPACs.  SRC filers are led by BF Borgers with 97 clients and 9.9% share, followed closely by M&K CPAs with 32 clients at 8.6% of the non-SPAC market.

Source: Audit Analytics

The vast majority of the registrants are from the manufacturing industry comprising 2,361 or 38% of the non-SPAC registrants.  The Big Four have 52% of the audit engagements, with Marcum rounding out the top five with 5% of the audits.  The top spot in all industries categorised is held by either EY or Deloitte.  Marcum holds the top spot for audits of foreign registrants at 10%, with MNP leading the audit engagements of Canadian registrants.  

This analysis of the auditor market share for SEC registrants as of May 14, 2023, highlights the dominance of the Big Four audit firms in the market. However, regional firms and other non-Big Four firms also play a significant role, particularly in certain segments such as SPACs, Accelerated filers and smaller reporting companies. This report provides valuable insights for stakeholders in understanding the current landscape of auditor engagements within the SEC registrant population.