Category: PwC

Biggest Companies in the world by market cap

by enthusiastDeloitte / EY / KPMG / PwC

2020 was a phenomenal year for the markets with some big changes in the Global Top 100 companies by market capitalization. Tesla for instance saw its market capitalization increase by 565% from the levels seen in March 2020. In this blog we’ll look at the global top 100 companies by market capitalization as of Mar-2021 and who their auditors are. The top-100 companies were identified based on the survey performed by PwC. This blog provides a listing of the top 100 companies along with their auditors.

Industry Sectors

Of the top 100 companies, 20 of them are in the Technology sector, 17 of them in the Consumer Discretionary sector, and 16 of them in the Healthcare sector. No surprises that Apple, Microsoft, Alphabet (Google), Facebook, and Tencent occupy spots within the top 10 companies. NextEra Energy is the only utility company within the top 100 list. See below for a detailed breakdown of companies by sector:

biggest companies of the world

Company Location

Of the top 100 companies, 59 of them are located in the United States while 11 of them are located in the People’s Republic of China. Germany, Japan, Netherlands, Switzerland, and UK have 3 companies each. See below for a detailed breakdown of companies by country:

biggest companies of the world

Auditors

Looking at the top 100 Companies, PwC leads in the number of audit clients followed by EY. PwC audits 37 companies while EY audits 26. Deloitte and KPMG audits 16 companies each. PwC received a total audit fee of $1.03 billion from these 37 companies while EY received an audit fee income of $861 million. The break-down of the auditors for these 100 companies along with their audit fees are as follows:

Big4 auditors

The public fillings of Saudi Aramco does not disclose how much they paid to PwC, their auditors. Hence the above numbers for PwC does not include the fees for the Aramco audit which is expected to be a very substantial amount. Samsung Electronics and Industrial & Commercial Bank of China switched to Deloitte in FY’20. However, for the purposes of the above chart, they are considered under their previous auditors.

Biggest Companies in the World

RankingCompanyCountrySectorMarket Cap. ($ bn)AuditorCurrencyTotal Audit Fees (Million)Total Audit Fees (USD Million)
1APPLE INCUnited StatesTechnology2051EYUSD22.1822.18
2SAUDI ARAMCOSaudi ArabiaEnergy1920PwC-Na-
3MICROSOFT CORPUnited StatesTechnology1778DeloitteUSD55.2955.29
4AMAZON.COM INCUnited StatesConsumer Discretionary1558EYUSD30.9030.90
5ALPHABET INCUnited StatesTechnology1393EYUSD29.8529.85
6FACEBOOK INCUnited StatesTechnology839EYUSD27.3327.33
7TENCENTChinaTechnology753PwCRMB16425.31
8TESLA INCUnited StatesConsumer Discretionary641PwCUSD13.5413.54
9ALIBABA GRPChinaConsumer Discretionary615PwCRMB162.5125.08
10BERKSHIRE HATHAWAYUnited StatesFinancials588DeloitteUSD48.8048.80
11TSMCTaiwanTechnology534DeloitteNTS70.322.51
12VISA INCUnited StatesIndustrials468KPMGUSD11.7411.74
13JPMORGAN CHASEUnited StatesFinancials465PwCUSD105.10105.10
14JOHNSON & JOHNSONUnited StatesHealth Care433PwCUSD58.6358.63
15SAMSUNG ELECTRONICSSouth KoreaTechnology431PwCKRW6,8666.00
16KWEICHOW MOUTAChinaConsumer Staples385Lixin CPA-Na-0
17WALMART INCUnited StatesConsumer Discretionary383EYUSD28.2328.23
18MASTERCARD INCUnited StatesIndustrials354PwCUSD9.949.94
19UNITEDHEALTH GRPUnited StatesHealth Care352DeloitteUSD27.0227.02
20LVMH MOET HENNESSYFranceConsumer Discretionary337EY & MazarsEUR15(EY); 8(Mazars)27.31
21WALT DISNEY COUnited StatesConsumer Discretionary335PwCUSD33.3033.30
22BANK OF AMERICAUnited StatesFinancials334PwCUSD67.5067.50
23PROCTER & GAMBLEUnited StatesConsumer Staples333DeloitteUSD30.9930.99
24NVIDIA CORPUnited StatesTechnology331PwCUSD6.906.90
25HOME DEPOT INCUnited StatesConsumer Discretionary329KPMGUSD8.148.14
26NESTLE SASwitzerlandConsumer Staples322EYCHF45.0049.23
27IND & COMM BKChinaFinancials290KPMGRMB224.0034.57
28PAYPAL HOLDINGSUnited StatesIndustrials284PwCUSD16.6416.64
29ROCHE HOLDINGSwitzerlandHealth Care283KPMGCHF23.7025.93
30INTEL CORPUnited StatesTechnology261EYUSD21.9721.97
31ASML HOLDING NVNetherlandsTechnology255KPMGEuro3.464.11
32TOYOTA MOTORJapanConsumer Discretionary254PwCYen5,73952.10
33COMCAST CORPUnited StatesTelecommunications248DeloitteUSD24.3024.30
34VERIZON COMMUNICATIONSUnited StatesTelecommunications241EYUSD50.7050.70
35EXXON MOBIL CORPUnited StatesEnergy236PwCUSD41.8041.80
36NETFLIX INCUnited StatesConsumer Discretionary231EYUSD7.527.52
37ADOBE INCUnited StatesTechnology228KPMGUSD8.088.08
38COCA-COLA COUnited StatesConsumer Staples227EYUSD40.1640.16
39MEITUANChinaTechnology226PwCRMB50.797.84
40PING ANChinaFinancials219PwCRMB12218.83
41CISCO SYSTEMSUnited StatesTelecommunications218PwCUSD28.2728.27
42AT&T INCUnited StatesFinancials216EYUSD69.8069.80
43L'OREALFranceConsumer Discretionary215PwC & DeloitteEuro12.4(PwC), 7.4(Deloitte)13.54
44CHINA CONSTRUCTION BANKChinaFinancials213EYRMB151.8623.44
45ABBOTT LABSUnited StatesHealth Care212EYUSD31.6731.67
46NOVARTIS AGSwitzerlandHealth Care212PwCUSD23.5023.50
47NIKE INCUnited StatesConsumer Discretionary209PwCUSD22.4022.40
48ORACLE CORPUnited StatesTechnology202EYUSD31.8031.80
49PFIZER INCUnited StatesHealth Care202KPMGUSD32.8232.82
50CHEVRON CORPUnited StatesOil & Gas202PwCUSD31.0031.00
51CHINA MERCHChinaFinancials196DeloitteRMB44.006.79
52PEPSICO INCUnited StatesConsumer Staples195KPMGUSD25.7725.77
53SALESFORCE.COMUnited StatesTechnology195EYUSD27.2827.28
54MERCK & COUnited StatesHealth Care195PwCUSD58.858.8
55ABBVIE INCUnited StatesHealth Care191EYUSD32.132.1
56BROADCOM INCUnited StatesTechnology189PwCUSD18.6918.69
57PROSUS NVNetherlandsTechnology181PwCUSD1111
58RELIANCE INDSIndiaEnergy180EY & DTS Assoc.INR597.38.02
59THERMO FISHERUnited StatesHealth Care180PwCUSD37.1337.13
60ELI LILLY & COUnited StatesHealth Care179EYUSD17.317.3
61AGRICULTURAL BANK OF CHINAChinaFinancials178PwCRMB122.318.88
62SOFTBANK GROUPJapanTelecommunications176DeloitteYen7867.14
63ACCENTURE PLCIrelandIndustrials176KPMGUSD26.9226.92
64TEXAS INSTRUMENTUnited StatesTechnology174EYUSD13.0513.05
65MCDONALDS CORPUnited StatesConsumer Discretionary167EYUSD11.411.4
66VOLKSWAGEN AGGermanyConsumer Discretionary165EYEuro5362.95
67BHP GROUP LTDAustraliaBasic Materials163EYUSD16.7016.70
68WELLS FARGO & COUnited StatesFinancials162KPMGUSD58.6058.60
69TATA CONSULTANCYIndiaTechnology161KPMGINR1461.96
70DANAHER CORPUnited StatesHealth Care160EYUSD29.9529.95
71NOVO NORDISKDenmarkHealth Care160PwCDKK425.71
72MEDTRONIC PLCIrelandHealth Care159PwCUSD17.6117.61
73WULIANGYE YIBIChinaConsumer Staples159Sichuan HuaxinRMB1.320.2
74COSTCO WHOLESALEUnited StatesConsumer Discretionary156KPMGUSD8.818.81
75T-MOBILE US INCUnited StatesTelecommunications156PwCUSD48.6248.62
76CITIGROUP INCUnited StatesFinancials152KPMGUSD98.698.6
77HONEYWELL INTLUnited StatesIndustrials151DeloitteUSD18.6918.69
78QUALCOMM INCUnited StatesTechnology151PwCUSD11.4611.46
79SAP SEGermanyTechnology151KPMGEuro1416.63
80BOEING COUnited StatesIndustrials149DeloitteUSD32.332.3
81ROYAL DUTCH SHELLNetherlandsOil & Gas148EYUSD5858
82NEXTERA ENERGYUnited StatesUtilities148DeloitteUSD11.2111.21
83UNITED PARCELUnited StatesIndustrials148DeloitteUSD19.8119.81
84UNION PAC CORPUnited StatesIndustrials148DeloitteUSD3.723.72
85UNILEVER PLCUnited KingdomConsumer Staples147KPMGEuro2630.88
86AIAHong Kong SARFinancials147PwCUSD25.2025.20
87LINDE PLCUnited KingdomBasic Materials146PwCUSD25.2125.21
88AMGEN INCUnited StatesHealth Care144EYUSD9.259.25
89BRISTOL-MYER SQBUnited StatesHealth Care141DeloitteUSD28.9028.90
90SIEMENS AGGermanyIndustrials140EYEuro68.6081.48
91BANK OF CHINAChinaFinancials139EYRMB23736.58
92PHILIP MORRIS INCUnited StatesConsumer Staples138PwCUSD25.8725.87
93LOWE'S COS INCUnited StatesConsumer Discretionary136DeloitteUSD4.194.19
94CHARTER COMMUNICATIONSUnited StatesTelecommunications135KPMGUSD10.2010.20
95CHINA MOBILEHong Kong SARTelecommunications134PwCRMB11417.60
96SONY GROUP CORPJapanConsumer Discretionary132PwCYen452941.11
97ASTRAZENECA PLCUnited KingdomHealth Care131PwCUSD20.3020.30
98ROYAL BANK OF CANADACanadaFinancials131PwCCAD50.8040.82
99STARBUCKS CORPUnited StatesConsumer Discretionary129DeloitteUSD8.498.49
100ANHEUSER-BUSCHBelgiumConsumer Staples128PwCUSD2020

Apple is the biggest company in the world in terms of market capitalization with a value of $2.05 trillion followed by Saudi Aramco with a market value of $1.92 trillion (as of Mar’21). Microsoft and Amazon occupy the third and fourth spot with a market value of $1.78 trillion and $1.56 trillion respectively.

Do read our other blogs on the top 500 companies in the US and their auditors.

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Biggest Big4 clients in Europe (Part-2)

by enthusiastDeloitte / EY / KPMG / PwC

Don’t miss Part-1 of this blog. Continuing from there,

Germany: The breakdown of the 15 top companies in Germany is as follows:

NameAuditorCurrencySum of Total Fees (Reporting Currency)Total Fees (Millions USD)
AdidasKPMGEuro2.503.03
AllianzPwCEuro77.6093.90
BASFKPMGEuro20.8025.17
BayerDeloitteEuro28.0033.88
DaimlerKPMGEuro52.0062.92
Deutsche BoerseKPMGEuro7.709.32
Deutsche PostPwCEuro11.0013.31
Deutsche TelekomPwCEuro17.0020.57
Infineon TechnologiesKPMGEuro4.024.87
LindePwCUSD25.2125.21
Muenchener RueckEYEuro12.4115.02
SAPKPMGEuro14.0016.94
SiemensEYEuro68.6083.01
Volkswagen PrefEYEuro53.0064.13
Vonovia SeKPMGEuro5.406.53
Grand Total399.24477.79

Switzerland: The breakdown of the 14 top companies in Switzerland is as follows:

NameAuditorCurrencySum of Total Fees (Reporting Currency)Total Fees (Millions USD)
ABBKPMGUSD44.1044.10
AlconPwCUSD10.6010.60
Cie Financiere RichemontPwCEuro12.2014.76
Credit Suisse GrpPwCCHF58.1064.49
GivaudanDeloitteCHF3.604.00
HolcimDeloitteCHF12.6013.99
LonzaKPMGCHF13.2714.73
NestleEYCHF45.0049.95
NovartisPwCUSD23.5023.50
Roche Hldg PKPMGCHF23.7026.31
SikaEYCHF6.407.10
Swiss Reinsurance CompanyPwCUSD43.3043.30
UBS GroupEYUSD73.0073.00
Zurich Insurance GroupPwCUSD57.2057.20
Grand Total426.57447.02

The summary for other European countries are provided below:

NameAuditorCurrencySum of Total Fees (Reporting Currency)Total Fees (Millions USD)
Belgium
Anheuser-Busch InbevPwCUSD2020
Total2020
Denmark
Dsv PanalpinaPwCDKK6510
Novo Nordisk BPwCDKK427
OrstedPwCDKK244
Vestas Wind SystemsPwCEuro45
Total13526
Spain
Amadeus It GroupEYEuro34
Bco SantanderPwCEuro104126
IberdrolaKPMGEuro2834
Industria De Diseno Textil SaEYEuro810
Total143173
Finland
Kone BPwCEuro78
NokiaDeloitteEuro2530
Total3138
Ireland
CRHDeloitteUSD1818
Total1818
Italy
EnelKPMGEuro–15
ENIPwCEuro11
Intesa SanpaoloKPMGEuro2024
Total2140
Netherlands
AdyenPwCEuro11
Ahold DelhaizePwCEuro810
ASML HldgKPMGEuro34
ING GrpKPMGEuro2631
Koninklijke DsmKPMGEuro67
PhilipsEYEuro1720
ProsusPwCUSD88
Total6982
Russia
GazpromOOO FBKRubles200
LukoilKPMGRubles2574
NovatekPwCRubles481
SberbankPwCRubles1092
Total4346
Sweden
Atlas Copco AEYSEK9011
Ericsson Lm BDeloitteSEK11414
Investor BDeloitteSEK506
Volvo BDeloitteSEK12415
Total37845

If you like such analysis, subscribe to this blog and do share. If there is any specific country you want me to look at or other similar analysis, drop me a comment.

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Biggest Big4 clients in Europe (Part-1)

by enthusiastDeloitte / EY / KPMG / PwC

This week we’ll look into the top 100 companies in Europe and their auditors. We utilize the iSTOXX European 100 index to identify the companies. iSTOXX European 100 index provides a blue-chip representation of Europe’s largest companies, combining indices from the Eurozone, the UK and Switzerland that include the largest companies from their respective region in terms of free-float market capitalization.

The breakout of the top100 companies by region is as follows:

Country# of Companies
UK23
France18
Germany15
Switzerland14
Netherlands7
Denmark4
Spain4
Russia4
Swedwn4
Italy3
Finland2
Belgium1
Ireland1
100

Interesting to note that France has a joint audit requirement. Joint Audits were mandated in 1966 to promote a sustainable French audit system. For the interested folks, here is a research paper assessing if two heads are better than one when it comes to audit.

Here is the number of clients and the audit fees big4 gets from these 100 companies:

Audit Firms# of Audits PerformedTotal Fees (Millions USD)
Deloitte13301
EY16479
KPMG25537
PwC28780
Deloitte & PwC & KPMG126
Deloitte & EY260
Deloitte & PwC & Mazars172
EY & KPMG165
EY & Mazars365
KPMG & Deloitte222
PwC & Deloitte124
PwC & EY369
PwC & GT14
PwC & Mazars272
OOO FBK10
Grand Total1002,577

The joint audits we see on the list above are French companies. Excluding that, PwC audits 28 of the top 100 companies and is a joint auditor for another 9 of them (37%). KPMG comes in next with 25 companies and is a joint auditor for 4 of them (29%). EY and Deloitte is a sole auditor for 16 and 13 companies respectively.

United Kingdom: The breakdown of the 23 top companies in UK is as follows:

NameAuditorReporting CurrencyTotal Fees (per reporting currency)Total Fees (Millions USD)
HSBCPwCUSD130130
BarclaysKPMGEuro5971
Royal Dutch Shell AEYUSD5858
BPDeloitteUSD5454
GlaxosmithklineDeloitteGBP3042
Lloyds Banking GrpPwCGBP2941
British American TobaccoKPMGGBP2840
Vodafone GrpEYEuro2834
Unilever PlcKPMGEuro2631
Glencore PlcDeloitteUSD2828
National GridDeloitteEuro2024
AstrazenecaPwCUSD2020
Rio TintoKPMGUSD2020
TescoDeloitteGBP1318
Reckitt Benckiser GrpKPMGGBP1318
DiageoPwCGBP1217
BHP Group Plc.EYUSD1717
PrudentialKPMGUSD1616
Relx PlcEYEuro911
London Stock ExchangeEYGBP57
ExperianKPMGUSD66
Anglo AmericanPwCUSD33
Compass GrpKPMGGBP12
Grand Total625709

France: The breakdown of the 18 top companies in France is as follows:

NameAuditorTotal Fees (Millions USD)
Air LiquidePwC & EY16
AirbusEY15
AXAPwC & Mazars51
BNP ParibasDeloitte & PwC & Mazars72
DanonePwC & EY14
EngieDeloitte & EY39
EssilorluxotticaPwC & Mazars21
Hermes InternationalPwC & GT4
KeringKPMG & Deloitte11
L’OrealPwC & Deloitte24
Lvmh Moet HennessyEY & Mazars28
Pernod RicardKPMG & Deloitte11
SafranEY & Mazars11
SanofiPwC & EY39
Schneider ElectricEY & Mazars26
Total EnergiesEY & KPMG65
VinciDeloitte & PwC & KPMG26
VivendiDeloitte & EY21
Grand Total495

Look out for Part-2 of this blog post to see the companies from other European Nations.

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PwC Australia Clients

by enthusiastPwC

For FY20, PwC recorded a revenue of AUD 2.6 billion. The headline revenue number remained unchanged from FY19. Big surprise was that Assurance service delivered a growth of 6% while Consulting and Financial Advisory were down 4% and 2% respectively.

The break-out of PwC’s revenues across the various service lines are as follows.

PwC had a 6% growth in their audit practice on a year-over-year basis for the last five years. However, the pandemic in 2020 led to a decline in non-audit revenues from non-audit clients. Non-audit revenues from non-audit clients fell 3% from AUD 1.94 billion to AUD 1.88 billion.

PwC retention rates increased across the board. Manager retention increased from 72% in FY19 to 79% in FY20. Senior Associates retention jumped from 67% to 77% while Associate retention jumped from 83% to 89%. Surely the pandemic increased retention! Consequently, Partner to Manager and Partner to Director ratio also improved.

PwC audits 40 of the 200 Companies in the ASX200 Index, a healthy 29% audit market share. Among companies in the ASX 200 Index, PwC leads other big4 firms in the financials, industrial, and real estate sectors. Refer to the earlier post on the distribution of ASX 200 clients among the other three big4 firms.

Top 25 PwC clients in the order of their market cap are as follows:

CompanySector
Commonwealth Bank of AustraliaFinancials
Westpac Banking CorporationFinancials
Fortescue Metals Group LtdMaterials
Transurban GroupIndustrials
Macquarie Group LtdFinancials
Brambles LtdIndustrials
ASX LtdFinancials
Aristocrat Leisure LtdConsumer Discretionary
Fisher & Paykel Healthcare Corporation LtdHealth Care
Amcor PlcMaterials
Sonic Healthcare LtdHealth Care
QBE Insurance Group LtdFinancials
Evolution Mining LtdMaterials
DexusReal Estate
Aurizon Holdings LtdIndustrials
Mirvac GroupReal Estate
StocklandReal Estate
GPT GroupReal Estate
Medibank Private LtdFinancials
TPG Telecom LtdTelecommunication Services
Computershare LtdInformation Technology
Seek LtdCommunication Services
Atlas ArteriaIndustrials
QUBE Holdings LtdIndustrials
Altium LtdInformation Technology

Check out the link if you want to read PwC 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 into the our 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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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.

PwC PCAOB Inspection Report

by enthusiastPwC

Last week PCAOB released its 2019 inspection report for PwC. Of the 60 audits reviewed, Part I.A deficiencies were identified in 18 of them (a deficiency rate of 30%). For 2018 and 2017, PwC’s deficiency rate were 25% and 24% respectively.

Year201920182017
Total audits reviewed605555
Audits with Part I.A deficiencies181413
Deficiency rate %30%25%24%

Part I.A deficiencies

Part I.A deficiencies break-down

Year201920182017
Both financial statement and ICFR audits13109
Financial statement only332
ICFR audit only212
181413

Deficiencies in financial statement audit include failure to perform sufficient testing related to an account, failure to obtain sufficient evidence due to overreliance on controls, 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.

Year201920182017
Revenue and related accounts948
Income taxes400
Allowance for loan losses311
Investment securities320
Inventory321
Business combinations042
Loans and related accounts031

Interesting to note here is the increase in deficiencies with respect to Revenue while Business Combinations which was a major area of deficiency in 2018 and 2017 having no deficiency in 2019.

Looking at the break-up by Industry sector, 14 audits were reviewed from the Information technology sector with deficiencies identified in 5 of them (36%!). Most of audits reviewed were within the $1 billion to $2.5 billion revenue range (16 of them). 5 issuers with revenues exceeding $50 billion were reviewed with deficiency identified in 1 of them.

Part I.B deficiencies

Following Part I.B deficiencies were identified:

Non-ComplianceReviewedDeficiency
AS 1301, Communications with Audit Committees164
PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants327
PCAOB Rule 3524, Audit Committee Pre-approval of Certain Tax Services121
PCAOB Rule 3526, Communication with Audit Committees Concerning Independence121

For me, the key statement on the report was “In connection with our 2019 inspection procedures for three audits, the issuers revised their reports on ICFR, and the firm modified its opinions on the effectiveness of the issuers’ ICFR to express adverse opinions and reissued its reports. In addition, in connection with our 2019 inspection procedures for one audit, the issuer restated its financial statements, and the firm revised and reissued its report.” So some of the PCAOB observations were significant enough for PwC to go back to their client and revise its previously issued opinion.

Quick thing to note here is that in releasing the PwC 2020 Audit Quality report, Wes Bricker, PwC Assurance Leader mentioned that for 2020, only 1 of the 52 engagements reviewed has a Part 1.A deficiency. So be on the look out for the next year report (0.02% deficiency!!).

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PwC Audit Clients in UK

by enthusiastPwC
Home » PwC » Page 2

PwC Fee Income

PwC UK had a fee income of 3.48 billion pounds in FY20 which is an increase of 0.5% from the prior year. For FY19 PwC UK had a fee income of 3.46 billion pounds. See below for a breakout of PwC fee incomes over the past five years. Fee income grew on an average of 4.8% over the past five years.

Looking at the break-down of fee income among audit clients and non-audit clients we notice that direct audit fees has increased on an average by 6% while non-audit services to audit clients has decreased on an average by 8%. Advisory income has increased on an average by 7% for 5 years. The table below shows the break-down in millions pounds.

PwC Quality Report

PwC’s UK 2020 Transparency report mentions that of the 17 audits reviewed, 11 (65%) audits were graded as good or limited improvements needed. 5 (29%) audits were graded as improvements needed. 1 (6%) audit needed significant improvement.

The Financial Reporting Council (FRC) published its latest inspection reports on PwC in July 2020. Of the 17 audits reviewed, 11 (65%) were graded as good or requiring limited improvements. 5 (29%) and 1 (6%) audits were graded as improvements required and significant improvements required respectively. For FTSE 350 audits, of the 12 audits reviewed, 8 (67%) were graded as good or requiring limited improvements. 3 (25%) and 1 (8%) audits were graded as improvements required and significant improvements required respectively. The summary of PwC’s inspection results for the past five years is noted below. In 2016, 82% of audits were graded as good vs. 67% in 2020.

PwC FTSE 350 Clients

PwC audits 95 of the 350 FTSE companies bringing in a total revenue of 336 million pounds. HSBC Holdings is the biggest client which brings in revenue of 110 million pounds, i.e. 33% of the total FTSE 350 audit fees. PwC has held the role of HSBC auditor for 5 years and will remain auditor until 2025 when the audit has be rotated per European rules on mandatory rotation. All 95 PwC clients and their audit fee is included in the below graphic.

The top 25 FTSE 350 audit clients of PwC in UK in the order of audit fee revenues are as follows:

CompanyAuditorTotal fees ('000) GBP
HSBC Holdings plcPwC110,700
Lloyds Banking Group plcPwC26,900
Aviva plcPwC21,900
Rio Tinto plcPwC14,490
Diageo plcPwC12,100
AstraZeneca plcPwC11,245
Rolls Royce Holdings PlcPwC11,000
G4S PlcPwC10,000
Pearson plcPwC7,000
Mondi PlcPwC5,100
Intertek Group plcPwC4,700
Coca-Cola HBC AGPwC4,487
Carnival plcPwC4,377
Johnson Matthey PlcPwC4,000
Bunzl plcPwC3,700
Weir Group plcPwC3,400
Babcock International GroupPwC3,200
ContourGlobal plcPwC3,170
Burberry Group plcPwC3,100
Vivo Energy PlcPwC2,974

Post a comment on any other metric you would like to know about EY UK or if you need this dataset. Look into our other blog posts on PwC, KPMG, and Deloitte UK. 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.

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Top UK Companies and their Auditors

by enthusiastDeloitte / EY / KPMG / PwC
Home » PwC » Page 2

In this blogpost we’ll look at the top Companies in UK and their auditors. To identify the top companies in UK we’ll use the FTSE350. FTSE 350 is made up of companies of FTSE 100 and FTSE 250 index companies which have their primary listing on the London Stock Exchange.

On analysis of the auditors for the top UK companies for FY20, PwC leads in number of audit clients. KPMG leads in total revenue. PwC audits 95 of the 350 UK companies bringing in total revenue of $336 million pounds. KPMG audits 88 of the 350 UK companies bringing in total revenue of $347 million pounds.

Below is a high level summary of audit clients and total revenue (audit and non-related fees).

The top 25 audit clients of big4 firms within FTSE 350 are below:

CompanyAuditorTotal Fees '000 (GBP)
HSBC Holdings plcPwC110,700
Barclays plcKPMG56,000
WPP plcDeloitte42,700
Royal Dutch Shell PlcEY40,754
BP PlcDeloitte36,980
Royal Bank of Scotland Group plcEY34,500
GlaxoSmithKline plcDeloitte30,400
Lloyds Banking Group plcPwC26,900
British American Tobacco plcKPMG25,200
Prudential plcKPMG22,943
Vodafone Group plcEY22,858
Glencore plcDeloitte22,641
Aviva plcPwC21,900
Standard Chartered plcKPMG20,150
BT Group plcKPMG19,752
National GridDeloitte18,000
CRH plcEY16,085
Micro Focus International plcKPMG15,396
Reckitt Benckiser Group PlcKPMG14,500
Rio Tinto plcPwC14,490
Unilever plcKPMG14,392
Diageo plcPwC12,100
AstraZeneca plcPwC11,245
Rolls Royce Holdings PlcPwC11,000
BHP Group PlcKPMG10,964

Look into our subsequent posts for an analysis of the respective clients of KPMG, PwC, EY, and Deloitte. Subscribe to our posts for information on Big4 firms. If there is some data point that you would like us to analyze, just drop in a comment.

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