November 4, 2022
SPACs: Auditor Market Share
Just a few years ago, the audit market for SPACs was dominated by two non-Big 4 firms, Withum & Marcum (see my 3rd blog here). Boy, have things changed. This Bloomberg Tax article says the Big 4 now rule the roost:
When SPACs became Wall Street’s favorite way to take companies public, the Big Four accounting firms steered clear, leaving audit work to smaller outfits churning out hundreds of fast, cheap audits of the blank-check vehicles.
For those freshly minted public companies that emerged from the boom, it’s been a different story. The largest firms — Deloitte & Touche LLP, PricewaterhouseCoopers LLP, KPMG LLP, Ernst & Young LLP and their affiliates— audit almost two-thirds of the approximately 330 companies that went public through special purpose acquisition companies since 2020 and are still trading today, according to Bloomberg data. EY and its affiliates lead the Big Four in the de-SPAC client market, with 65 companies that went public via SPAC on its roster.
The article explains why the Big 4 have jumped into the fray, but here’s my TL;DR version. Anyway, while the auditors found the streets paved with SPAC gold for a couple of years, the article notes that they now find themselves with a lot of problematic clients on their hands.
– John Jenkins