Here’s what the concentration of public company audits looks like:
- $26.4 trillion global market capitalization
- >98% – share of market cap audited by Big 4
- 1.1% – share of market cap audited by next 3 firms
- <0.9% – share audited by remaining 707 CPA firms registered with PCAOB who audit a public company
That is according to comments by PCAOB board member Jeanette Franzel as reported by Accounting Today – PCAOB Mulls Deregistering Hundreds of Accounting Firms.
I just have to do the math:
- Firms – market cap of audit clients
- 4 – >$25.9T
- 3 – $0.29T
- 707 – <$0.24T
And of course I had to calculate the average per firm.
For the Big 4, that would be an average of $6.48 trillion of market cap of clients per firm. The smaller 707 firms on average audit clients with total of less than $0.34 billion market cap, yes about $340 million.
The ratio of average cap of audit client for Big 4 to small 707 is around 19,000:1.