KPMG has increased its overall lead as the most prolific auditor of stock market companies, while rival PwC remains the most dominant auditor of the UK’s largest listed companies, industry data has shown.
According to the latest quarterly figures from Adviser Rankings, KPMG gained five stock market clients for the three months to 5 August, taking its total number of clients to 399 and extending its lead over PwC.
Among the FTSE 100, PwC continues to hold the most clients (39) and remains significantly ahead of nearest rival KPMG with 24 clients. The auditor booked a solitary gain among the FTSE top-tier through the period, but that could be cancelled out during the current quarter. It has been announced that PwC will step down as auditor to Sage in September, bringing its long-standing audit relationship with the FTSE 100 software business to a close.
Deloitte retained its position as the most dominant FTSE 250 auditor with 75 clients, while BDO continues to audit the most AIM clients.
Adviser Rankings has also published the leading auditors in the eight main FTSE market sectors for the first time. BDO is the clear frontrunner in basic materials; reflective, perhaps, of a dedicated natural resources team that is focused solely on extractive industries and agriculture.
“It’s unsurprising that BDO pays such close attention to the broader sector given that the FTSE 100 is top-heavy with heavyweight miners and energy companies like Rio Tinto, BP and Royal Dutch Shell,” the report said.
PwC is the preferred option for consumer goods companies. The firm has a substantial lead over second placed KPMG, which, in turn, holds a double-digit advantage in client numbers over EY sitting in third place. The Big Four of Deloitte, KPMG, PwC and EY lead the way in consumer services – the first two of which share top billing with 45 clients each.
KPMG, PwC and EY are the top three firms for the all-important financials sector. The UK’s banks have been quick to pre-empt EU and UK rules designed to encourage competition in the audit market. Earlier this year, Barclays announced that it is to replace PwC as its auditor, ending the Big Four firm’s 120-year tenure vetting the books of Britain’s second-largest bank. PwC is to replace KPMG as auditor to HSBC from 2015. It’s probably the most lucrative audit in the FTSE 100 and has been successfully carried out by KPMG since 1991.
The Big Four dominate the health care sector, albeit with Grant Thornton squeezed in third place. KPMG and PwC share the lead in the sector with 16 clients apiece, including respective remits for the UK’s pharmaceutical heavyweights AstraZeneca and GlaxoSmithKline.
Grant Thornton is the dominant auditor within the technology sector, closely followed by KPMG and PwC.
The top auditors by total stock market sectors are as follows:
Basic Materials: BDO – 39 clients
Consumer Goods: PwC – 37 clients
Consumer Services: Delloite/KPMG – 45 clients each
Financials: KPMG – 150 clients
Health Care: PwC/KPMG – 16 clients each
Industrials: KPMG – 77 clients
Oil & Gas: PwC – 29 clients
Technology: Grant Thornton – 27 clients
The UK’s imminent exit from the EU that may now put the audit committee to the ultimate test
Audit tendering has turned from good practice to legal practice under the EU audit reforms
Businesses will have to think more strategically about where they can source those non-audit services in the future
The FRC has raised concerns that the FTSE 350 audit market remains highly concentrated among the Big Four despite high levels of tendering and rotation