Author: enthusiast

EY Australia Clients

by enthusiastEY

EY Australia revenues were AUD 2.13 billion in FY20 which is an increase of 13% from revenues of AUD 1.89 billion. Audit revenues specifically increased by 7%. The below chart shows the growth of EY’s revenues over the past five years. Around 75% of EY’s revenues come from non-audit services performed for non-audit services. The remaining 25% are from audit and non-audit services to audit clients.

Of the 200 Companies in the ASX200 Index EY audits 60 of them. That is a 31% audit market share. EY leads in the number of audit clients among the top 200 companies in Australia. EY has a leading number of clients in the Communication services, Consumer discretionary, Consumer staples, Energy, Healthcare, Information Technology, and Telecommunication services sector. See below for a break-up of EY’s audit clients among the various sectors:

Top 25 EY audit clients in the order of the clients market capitalization are as follows:

CompanySector
CSL LtdHealth Care
National Australia Bank LtdFinancials
Wesfarmers LtdConsumer Discretionary
Telstra Corporation LtdTelecommunication Services
Newcrest Mining LtdMaterials
Woodside Petroleum LtdEnergy
Coles Group LtdConsumer Staples
Ramsay Health Care LtdHealth Care
REA Group LtdCommunication Services
The a2 Milk Company LtdConsumer Staples
Afterpay LtdInformation Technology
Xero LtdInformation Technology
James Hardie Industries PlcMaterials
Santos LtdEnergy
Scentre GroupReal Estate
Origin Energy LtdEnergy
Magellan Financial Group LtdFinancials
Tabcorp Holdings LtdConsumer Discretionary
Crown Resorts LtdConsumer Discretionary
Coca-Cola Amatil LtdConsumer Staples
Vicinity CentresReal Estate
AMP LtdFinancials
Bluescope Steel LtdMaterials
Worley LtdEnergy
Harvey Norman Holdings LtdConsumer Discretionary

Check out the link if you want to read EY’s latest Audit Transparency report. We are starting a new blogpost to collect the salary data to help all current and prospective employees of accounting firms. So if interested, update the form and results will be published soon.

Do read our other blog posts

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Top Australian Companies and their auditors

by enthusiastDeloitte / EY / KPMG / PwC

Focusing our attention to Australia. We previously looked into the S&P 500 US auditors. We also examined FTSE 350 UK auditors in our previous posts.

Audit market share

ASX200 Index has the 200 largest companies in Australia by float adjusted market capitalization. We’ll now look at these 200 Companies to identify their auditors. EY leads with 60 audit clients followed by PwC with 57 clients. KPMG comes in third with 41 clients and Deloitte with 29 clients. Non big-4 firms collectively audit 11 companies.

Audit market share by sectors

Next looking at the break-down of the 200 companies by the various sectors and their auditors. All big-4 firms have share in all sectors except for utilities where Deloitte audits 3 of the 4 clients.

Big4 revenues

The revenues of the big4 audit firms across five years are provided below. PwC leads in total revenues followed by Deloitte, EY, and KPMG. PwC revenues for 2020 was AUD 2.6 billion while KPMG revenues for 2020 was AUD 1.9 billion. A difference of AUD 700 million between the top and last ranked firm.

Audit revenues of big4 firms

Looking at just the audit revenues for the big4 firms for FY20, PwC brings in audit fees of AUD 475 million. EY follows with AUD 417 million. KPMG brings in AUD 363 million. Deloitte brings in AUD 305 million.

Audit Revenue (AUD millions)PwCEYKPMGDeloitte
2020475417363305
2019443390356288
Growth7%7%2%6%

ASIC Inspection firms

Looking into the Audit Inspection reports by ASIC (Australian Securities & Investments Commission) for FY20, EY has the least number of findings among the big4 firms. Only 14% of the areas reviewed for EY had findings while 35% of the areas reviewed for Deloitte had findings. Based on review of 55 financial reports of listed and public interest entities audited by EY, only 2 entities made material changes to their financial statements. The findings for other big4 firms are summarized in the table below.

Audit FirmsDeloitteKPMGPwCEY
Key audit areas reviewed26393535
Findings identified91085
2020 (%)35%26%12%14%
2019 (%)32%33%18%22%
Financial reports reviewed45473655
Material changes based on inquiries4121
(%)9%2%6%2%

The link to the reports for Deloitte, KPMG, EY, and PwC is provided in this link.

Look into our blog posts for additional information on the audit clients for the big4 firms:

Deloitte Australia clients

KPMG Australia clients

EY Australia clients

PwC Australia clients

Subscribe this blog and stay updated on the latest happenings in the big4 audit space. If there is any specific items you want us to look into, please drop in a comment.

Do read into the other published blogs.

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4/30/21 – Auditor Changes

by enthusiastAuditor changes

Couple of changes between the weeks of 4/10 to 4/30. KPMG gains two clients while EY and Deloitte gains one client each.

Energy 11 L.P switched from GT to EY. TG Therapeutics changed from CohnReznick to KPMG. Chesapeake Granite Wash Trust changed from PwC to GT. Alphatec Holdings, Inc. changed auditors from Mayer Hoffman to Deloitte. Biomx Inc. switched to PwC while J Jill changed from PwC to GT. Duluth Holdings switched from GT to KPMG.

CompanyOld AuditorNew Auditor
Riley Exploration Permian, Inc.Moss AdamsBDO
Alpha Investment Inc.Turner Stone–
Energy 11, L.PGTEY
Acacia Research CorpGTBDO
TG Therapeutics, Inc.CohnReznickKPMG
Rcmw Group, Inc.MNPRBSM
Leader Hill CorpJP CenturionAudit Alliance
Zoom Telephonics, Inc.MarcumRSM
Commonwealth Income & Growth Fund IvBDOMorison Cogen
Altair International Corp.Jorgensen & CoFruci & Associates
Phoenix Rising Companies, Inc.KCCW–
Vanjia CorpTotal Asia Assoc.Yusufali & Assoc.
Brooklyn Immunotherapeutics, Inc.Baker Tilly–
Aikido Pharma Inc.MarcumWithum
Unique Logistics International IncBaker TillyMarcum
Bio Essence CorpRuan CPAKeith Zhen CPA
Mu Global Holding LtdTotal Asia Assoc.JP Centurion
Mechanical Technology IncWojeski & CoUHY LLP
Lazydays Holdings, Inc.MarcumRSM
Commonwealth Income & Growth Fund VBDO–
Future Fintech Group Inc.BF BorgersOnestop Assurance
Chesapeake Granite Wash TrustPwCGT
Pacific Vegas Global Strategies IncMoore StephensMSPC
Colony Bankcorp IncMMMMauldin & Jenkins
Commonwealth Income & Growth Fund Vii, LpBDO–
Empire Petroleum CorpHogan TaylorMoss Adams
Acacia Research CorpGTBDO
Commonwealth Income & Growth Fund ViBDO–
Mawson Infrastructure Group Inc.GTLNP
Alphatec Holdings, Inc.Mayer HoffmanDeloitte
Biomx Inc.Brightman AlmagorPwC
J.Jill, Inc.PwCGT
Ammo, Inc.MarcumPannell Kerr Foster
Duluth Holdings Inc.GTKPMG
Healthcare Solutions Management Group, Inc.BMKRBF Borgers

4/9/21 – Auditor Changes

by enthusiastAuditor changes

Bi-weekly update: Couple of wins for Deloitte this week along with minor losses. PwC lost 2 audit clients while gaining one. Deloitte won 5 clients and lost 2 audit clients. EY lost 1 and gained 1 audit client.

Clene Inc. and Varex Imaging Corp. switched from PwC to Deloitte. Essential properties Realty Trust changed their auditors from EY to GT. Mimedx Group Inc switched from BDO to Deloitte. Custom Truck One Source and Ra Medical Systems switched from Deloitte. View Inc. changed from Withum to PwC.

CompanyOld AuditorNew Auditor
Sterling Real Estate TrustBaler TillyRSM
Clene Inc.PwCDeloitte
Varex Imaging CorpPwCDeloitte
Texas Pacific Land CorpLane GormanDeloitte
Coffee Holding Co IncMarcumEisner
Cang Bao Art Trade CenterJLKZWWC
Universal Logistics Holdings Inc–GT
Essential Properties Realty TrustEYGT
First United Corp–Crowe
FreightCar America, Inc.–GT
One Group Hospitality Inc.Plante Moran–
SmartMetric, Inc.Prager MetisBoyle
Traqiq Inc.AJSHTR Chadha & Co.
Fortitude Gold CorpPlante MoranHaynie
Beam GlobalSalbergRSM
Mimedx Group IncBDODeloitte
Eagle Bancorp IncDHGCrowe
Custom Truck One Source, Inc.DeloitteEY
Body & Mind IncMarcumSadler Gibb
BTRS Holdings Inc.MarcumBDO
Metromile, Inc.GTMoss Adams
Joint CorpPlante MoranBDO
Ra Medical Systems IncDeloitteHaskell White
Vyant Bio, Inc.MarcumDeloitte
View IncWithumPwC

3/27/21 – Auditor changes

by enthusiastAuditor changes

Couple of changes in the three weeks of March. KPMG had a net loss of 4 audit clients while PwC gained 4 audit clients.

3/5/21 to 3/27/21GainLossNet
PwC404
Deloitte2-3-1
KPMG2-6-4
EY5-41
CompanyOld AuditorNew Auditor
Seedo CorpEYIlanit Halperin
Predictive Technology Group IncDeloitteTanner LLC
Commonwealth Income & Growth Fund IVBDO–
Sector 5 IncFruciBorgers
Commonwealth Income & Growth Fund VIIBDO–
Xtreme Fighting Championships IncBoyleBailey
Commonwealth Income & Growth Fund VIBDO–
Commonwealth Income & Growth Fund VBDO–
Phoenix Rising Companies, Inc.Total Asia Assc.KCCW Accountancy
Qumu CorpRSMKPMG
Iovance Biotherapeutics IncMarcumEY
Assertio Holdings, Inc.EYGT
Clearway Energy, Inc.KPMGEY
Fortune Valley Treasures, Inc.WWCMalone Bailey
First United CorpBaker TillyCrowe
Clearway Energy LLCKPMGEY
Universal Logistics Holdings IncBDOGT
Tidewater IncDeloittePwC
Safeguard Scientifics IncKPMGGT
Pluristem Therapeutics IncEYPwC
Protara Therapeutics, Inc.MarcumEY
Synalloy CorpKPMGBDO
Mid-Southern Bancorp, Inc.Monroe ShineBKD
First Banchares IncCroweBKD
Willis Lease Finance CorpKPMGGT
FreightCar America, Inc.Deloitte–
Red Robin Gourmet Burgers IncKPMGDeloitte
BioXcel Therapeutics, Inc.BDOEY
Landsea Homes CorpRSMPwC
EBIX IncRSMKGS
US Concrete IncEYKPMG
PureCycle Technologies, Inc.MarcumGT
Aeva Technologies, Inc.MarcumDeloitte
Nuvve Holding Corp.MBPMoss Adams
View, Inc.WithumSmithPwC
Auditor changes 3/27/21

3/5/21 – Auditor Changes

by enthusiastAuditor changes

Couple of big changes past two weeks. KPMG lost 5 audit clients while gaining only 1. Deloitte gained 3 clients while losing only 1 client.

CompanyOld AuditorNew Auditor
BankUnited, Inc.KPMGDeloitte
PGT Innovations, Inc.KPMGEY
SavMobi Technology Inc.BF BorgersJLKZ
Commonwealth Income & Growth Fund VII, LPMorison–
Tofutti Brands IncEisnerAmperMazars
Commonwealth Income & Growth Fund VIMorison–
Commonwealth Income & Growth Fund VMorison–
Teligent, Inc.DeloitteGrassi & Co.
Apex 11 Inc.PBT&K–
Givemepower CorpBenjamin & KoMadhava Rao
SOBR Safe, Inc.HallMGO
First Citizens Bancshares IncDixon HughesKPMG
China XD Plastics Co LtdKPMGFriedman
Clinigence Holdings, Inc.PragerMarcum
Takung Art Co., Ltd.MarcumWWC
Zomedica Corp.MNPGT
Sonasoft CORPThayer O’NealTPS Thayer
Nerium Biotechnology IncRSMADKF
Digital Turbine, Inc.SingerGT
Nautilus, Inc.KPMGGT
Alliance Resource Partners LpEYGT
CarLotz, Inc.WithumDeloitte
Laboratory Corp Of America HoldingsPwCDeloitte
John Bean Technologies CORPKPMGPwC
ChargePoint Holdings, Inc.WithumPwC
SmartKem, Inc.REM & Co. LLPMercer & Hole
Auditor Changes

2/20/21 – Auditor Changes

by enthusiastAuditor changes

EY gained 3 audits in the last two weeks followed by KPMG which gained 2 audits. Deloitte and PwC each gained 1 audit.

CompanyOld AuditorNew Auditor
Alliance Bioenergy Plus, Inc.ParitzPrager Metis CPA’s
Noble Midstream Partners LpKPMGPwC
Kiwa Bio-Tech Products Group CorpFriedmanJLKZ CPA
Cemtrex IncHaynieGrassi & CO
Bioplus Life Corp.Total Asia AssociatesJP Centurion & Partners
Ecco Auto World CorpTotal Asia AssociatesJP Centurion & Partners
Access-Power & Co., Inc.–BF Borgers
Fht Future Technology LtdTAAD LLPMaloneBailey
Folkup Development Inc.Fruci & AssociatesJP Centurion & Partners
Dswiss IncTotal Asia AssociatesJP Centurion & Partners
Century Cobalt Corp.Michael GillespieFruci & Associates
Artisan Consumer Goods, Inc.Michael GillespieBF Borgers
General Moly, IncPlante & Moran–
Lmp Automotive Holdings, Inc.GrassiKPMG
Ebix IncRSM–
Advent Technologies Holdings, Inc.MarcumEY
Nuvation Bio Inc.WithumKPMG
Butterfly Network, Inc.WithumDeloitte
Gemini Therapeutics, Inc.WithumEY
E2Open Parent Holdings, Inc.WithumEY
Metromile, Inc.Moss AdamGT
Plby Group, Inc.MarcumPrager Metis
Force Protection Video Equipment Corp.Assurance DimensionsRSMB
Auditor changes
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PCAOB Inspection reports

by enthusiastDeloitte / EY / KPMG / PwC

Consistent improvement by Deloitte, EY, and KPMG in their deficiency rate. However, an increasing deficiency rate noticed for PwC. Deloitte has the lowest deficiency rate of 10% for 2019 followed by EY and KPMG. PwC had the highest deficiency rate among the Big4 firms. We’ll have a post soon on the performance of other firms.

PCAOB inspection deficiency rates
Year201920182017
PwC30%25%24%
Deloitte10%12%20%
EY18%26%31%
KPMG29%37%50%

Interesting to note that PwC revised reports for three audits the most among big 4 firms. Probably shows the extent of influence they have over the clients. Check out the inspection report details for each of these firms in subsequent posts.

Do read our individual blogs on the Inspection reports for PwC, EY, KPMG, and Deloitte.

EY PCAOB Inspection Report

by enthusiastEY

PCAOB released its 2019 inspection report for EY in FY 2020. Of the 60 audits reviewed, Part I.A deficiencies were identified in 11 of them (a deficiency rate of 18%). For 2018 and 2017, EY’s deficiency rate were 26% and 31% respectively.

Year201920182017
Total audits reviewed605455
Audits with Part I.A deficiencies111417
Deficiency rate %18%26%31%

Part I.A deficiencies

Part I.A deficiencies break-down

Year201920182017
Both financial statement and ICFR audits51015
Financial statement only411
ICFR audit only231
111417

Deficiencies in financial statement audit include failure to perform sufficient testing related to an account, failure to obtain accuracy and completeness of data used in substantive testing, and failure to evaluate data and assumptions in developing an estimate. Deficiencies in ICFR audit include nonidentification of controls related to significant account, nontesting of design and operating effectiveness of controls, and failure to test the accuracy and completeness of data used in controls.

Following are the audit areas with frequent Part I.A deficiencies. These are also some of the audit areas most frequently reviewed.

Audit area201920182017
Revenue and related accounts748
Investment securities123
Business combinations263
Long-lived assets210
Allowance for loan losses130

Improvements noted in auditing Business Combinations.

Looking at the break-up by Industry sector, 12 audits were reviewed from the Financial services sector with deficiencies identified in 1 of them (0.08%!). Most of audits reviewed were within the $100 million to $500 million revenue range (11 of them). 3 issuer with revenues exceeding $50 billion were reviewed with 1 deficiency identified.

Part I.B deficiencies

Following Part I.B deficiencies were identified:

Non-ComplianceReviewedDeficiency
AS 1205, Part of the Audit Performed by Other
Independent Auditors		142
AS 2201, An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements181
PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants131
PCAOB Rule 3524, Audit Committee Pre-approval of Certain Tax Services101

Looking at EY actions to these deficiencies, its noted, “In connection with our 2019 inspection procedures for two audits, the issuers revised their reports on ICFR, and the firm revised its opinions on the effectiveness of the issuer’s ICFR to express adverse opinions and reissued its reports.“

Overall, improvement by EY!!

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