Professional Services Monitor: Today

 

April 20, 2010

Preliminary FY2009 Audit Fees

Filed under: ARGI,Audit Fees,News — psmtoday @ 5:04 pm

Between January 1 and April 15, 2010, we have processed 2,322 DEF-14A proxy statements, the primary form on which US public companies disclose fees paid to their auditors.  While this is by no means a complete set of data on FY2009, it does represent about 40% of what should be eventually filed.  All analysis below is based upon that set of 2,322 filers.  We will update again in two months when most of the rest of FY2009 should be filed.

Emblematic of the overall economic climate, of the 10 firms with largest aggregate fees only PricewaterhouseCoopers experienced positive growth (1.9%) between FY2009 and FY2008.  Next closest was Grant Thornton at -2.1%.  Again, this is from among the 2,322 filers noted above.

Rank Auditor Clients FY2009 FY2008 Change
1 PricewaterhouseCoopers 375 $2,271,811,789 $2,227,815,201 1.9%
2 Ernst & Young 519 $1,545,044,911 $1,615,883,337 -4.6%
3 Deloitte 338 $1,345,466,037 $1,449,723,665 -7.7%
4 KPMG 364 $1,154,240,231 $1,182,562,186 -2.5%
5 Grant Thornton 114 $81,429,078 $83,163,732 -2.1%
6 BDO Seidman 64 $52,277,852 $54,521,828 -4.3%
7 Crowe Horwath 63 $20,672,469 $21,320,724 -3.1%
8 McGladrey & Pullen 38 $13,620,403 $14,690,576 -7.9%
9 Moss Adams 20 $9,114,058 $9,615,475 -5.5%
10 ParenteBeard 36 $8,471,851 $8,003,648 5.5%
All Others 391 $86,596,459 $88,549,838 -2.3%
2,322 $6,588,745,138 $6,755,850,210 -2.5%

The 25 largest filers by total fees between 1/1/2010 and 4/15/2010 had an average growth of about 4%.  AIG’s $193 million paid to PricewaterhouseCoopers is the largest total we have tracked, eclipsing the $156 million General Motors paid to Deloitte for FY2002.  AIG’s proxy included the explanatory sentence, “The 2009 increase in audit and audit-related fees was primarily related to nonrecurring divestiture and restructuring activities related to AIA, ALICO and Nan Shan and other separate reporting requirements related to the Company’s restructuring activities.”

Rank Company Auditor (FY09) Total Fees Change
1 American International Group Inc. PricewaterhouseCoopers $193.6 Mil. 32.3%
2 Bank of America Corp. PricewaterhouseCoopers $128 Mil. 34.8%
3 General Electric Co. KPMG $110.1 Mil. -20.8%
4 Goldman Sachs Group Inc. PricewaterhouseCoopers $106.9 Mil. 6.5%
5 Citigroup Inc. KPMG $95.9 Mil. -0.2%
6 JP Morgan Chase & Co. PricewaterhouseCoopers $95.8 Mil. -12.4%
7 Morgan Stanley Deloitte $70.7 Mil. 14.6%
8 International Business Machines PricewaterhouseCoopers $66.3 Mil. -8.1%
9 Merck & Co. PricewaterhouseCoopers $55.7 Mil. 49.7%
10 Hewlett Packard Co. Ernst & Young $53.8 Mil. 9.7%
11 MetLife Inc. Deloitte $51.2 Mil. 3.3%
12 Ford Motor Co. PricewaterhouseCoopers $51.2 Mil. -11.5%
13 Wells Fargo & Co. KPMG $50.2 Mil. 48.9%
14 United Technologies Corp. PricewaterhouseCoopers $46.9 Mil. 3.5%
15 Prudential Financial Inc. PricewaterhouseCoopers $45.1 Mil. 8.9%
16 Dow Chemical Co. Deloitte $44.1 Mil. 15.6%
17 Tyco International Ltd. Deloitte $39.9 Mil. -36.1%
18 Pfizer Inc. KPMG $37.4 Mil. 25.7%
19 Verizon Communications Inc. Ernst & Young $36 Mil. 0.0%
20 Thomson Reuters Corp. PricewaterhouseCoopers $34.8 Mil. -13.5%
21 Johnson & Johnson PricewaterhouseCoopers $34.1 Mil. -13.0%
22 Honeywell International Inc. PricewaterhouseCoopers $34 Mil. -3.8%
23 Exxon Mobil Corp. PricewaterhouseCoopers $33.5 Mil. -4.2%
24 Coca Cola Co. Ernst & Young $33 Mil. -5.6%
25 AT & T Inc. Ernst & Young $31.2 Mil. -1.9%

The SEC requires companies to disclose fees paid to their auditors in four categories–audit, audit-related, tax and other.  Audit represented 79.3% of the total in this segment, and the overall distribution is essentially unchanged between FY2009 and FY2008.

July 1, 2009

2009 Big Four Annual Report Now Available

Filed under: ARGI,News — psmtoday @ 4:26 pm

Our 2009 Big Four Annual Report is now available for immediate purchase and download. More information at www.amesrgi.com/products_annualreport.asp

March 27, 2009

Auditor Lists: Long Distance (Audit) Relationships

Filed under: ARGI,News — psmtoday @ 2:21 pm

We’ve posted a new, somewhat superfluous, list to our Auditor Market Share Lists.  We look at 30 companies with long-distance audit relationships.  That is, the auditor’s office noted on the audit opinion is some distance from the company’s registered headquarters address.

(more…)

February 18, 2009

Auditor Market Share Lists: Largest Private Companies and Top Japanese Companies

Filed under: ARGI,News — psmtoday @ 9:19 am

We’ve posted two new lists to our Auditor Market Share Lists.  First, we look at the 10 largest private companies from Forbes’ Top Private Companies list.  Second, we look at the change in PricewaterhouseCooper’s Japanese market share, following the turmoil with its Japanese affiliate firms, through the firm’s share in 2008 vs. 2009 of the Financial Times Japanese 500 list.

(more…)

December 22, 2008

Auditor Market Share Lists: 10 Audit Firms with 10 or Fewer SEC Clients

Filed under: ARGI,News — psmtoday @ 5:11 pm

We’ve posted a new list to our Auditor Market Share Lists.  This list ranks audit firms by client revenue among those with 10 or fewer SEC clients.

(more…)

August 6, 2008

Auditor Market Share Lists

Filed under: ARGI,News — psmtoday @ 1:55 pm

We’ve added a new feature to the ARGI website, Auditor Market Share Lists. We will be adding monthly lists taken from our market research products.  For August, we have listed the largest auditor changes we’ve reported between January and June 2008, ranked by auditor fees, and the auditor of the college football preseason top 10.

November 21, 2006

Big Four Competition: Ernst & Young Maintains Advantage

Ames Research Group this week released the latest Big Four Quarterly Competitive Summary, covering competitive auditor change activity between the fourth quarter of 2005 and third quarter of 2006. 
 This report covered nearly 440 events involving Big Four firms.  ARGI research covers both public and privately-held companies.
Ernst & Young continues to perform well in winning new work and doing so efficiently.  E&Y won the most new clients during the 12 months covered, and the firm won almost 50% of the engagements on which it proposed. 
Deloitte’s engagement success rate, or “batting average” fell slightly.  However, Deloitte continues to narrow its net loss in clients over a 12-month period.  Since 2003, the Big Four have collectively lost clients, but Deloitte has moved back towards a net gain quicker than the other firms.
KPMG dropped slightly in its invitation and engagement rates, but also improved slightly on its net client loss.
PricewaterhouseCoopers trails the rest of the Big Four by a significant margin in both invitations and successful engagements, and continues to have a large net loss in market share.

Ames Research Group’s Big Four Quarterly Competitive Summary examines public company auditor changes, certain M&A events, and significant private company auditor changes on a rolling basis, covering the most recent previous four quarters. In addition to studying asking the basic question of who won and who lost, ARGI’s QCS asks why the winner won and the loser lost, and what other firms were invited to propose on an engagement. The result is a detailed strategic tool for evaluating a firm’s strengths and weaknesses in winning new business.

For more information on the Big Four Quarterly Competitive Summary, please contact ARGI at (425) 275-0369.

May 16, 2006

ARGI Releases Big Four Quarterly Competitive Summary

Filed under: ARGI,Deloitte,Ernst & Young,Firms,News — psmtoday @ 1:10 pm

On May 15, Ames Research Group released its latest Big Four Quarterly Competitive Summary, covering auditor change and M&A activity between Q2 2005 and and Q1 2006. Some key findings from this report include Ernst & Young’s resurgence in winning percentage. For the first time in nearly four years, E&Y led the Big Four in engagements won as a percentage of invitations to propose. Deloitte had led the Big Four in this performance metric in the previous six quarterly reports. Deloitte continues to narrow its net loss in audit clients. However, no Big Four firm has had a net positive gain in clients since the four quarters up through Q3 2002. That period of time also happen to include the bulk of Andersen-collapse induced activity.
On a positive note, a surprisingly large and consistent number of company executives interviewed for this study cited Deloitte’s value-for-fees as a reason for engaging that firm in the past four quarters. The Big Four has been blasted by mid-market companies for steep fees increases, particularly following the SOX 404 requirements. To have companies actually applauding a Big Four firm for providing value for fees is a positive development.

The Big Four Quarterly Competitive Summary examines public company auditor changes, certain M&A events, and significant private company auditor changes on a rolling basis, covering the most recent previous four quarters. In addition to studying asking the basic question of who won and who lost, ARGI’s QCS asks why the winner won and the loser lost, and what other firms were invited to propose on an engagement. The result is a detailed strategic tool for evaluating a firm’s strengths and weaknesses in winning new business. For more information on Big Four Quarterly Competitive Summary, please contact your firm’s competitive intelligence unit.