February 17, 2022

Auditor Tenure: The Century Club

This Audit Analytics blog reviews the tenure of public company auditors, and notes that for Russell 3000 companies, the average tenure of their outside auditors depends a lot on their size. As of 2021, large accelerated filers in the Russell 3000 retain an outside audit firm for an average of 22 years, with a median of 17 years. Accelerated filers and non-accelerated filers both average about 12 years, but the medians differ pretty dramatically. Accelerated filers retain their audit firms for a median of 8 years, while non-accelerated filers retain their for a median of 3 years.

The more interesting data in the blog addresses the number of companies that have retained the same outside auditor for over 100 years. A total of 18 companies are members of this particular century club. Procter & Gamble leads the way – it has retained Deloitte since 1890. Another Buckeye State company, Goodyear, is right behind P&G. The tire giant has retained PwC since 1898.

In fact, I just noticed this as I was drafting this blog, but Ohio companies really have a thing for long relationships with their auditors. Five of the top ten members of the century club are headquartered in Ohio. In addition to P&G and Goodyear, Cleveland-based Sherwin Williams, Canton-based Timken, & Toledo-based Dana all have had the same auditor for more than a century. I guess I shouldn’t be surprised that my home state is so well represented – Audit Analytics says that 78% of the companies that have retained their auditors for more than 100 years are in manufacturing.

John Jenkins