In this third installment of the mutual fund market share series, we look at how fund type impacts the audit market.
Here, we analyze the composition of the audit market across six fund types:
- open-ended funds;
- closed-ended funds;
- exchange-traded funds (ETFs);
- money market funds;
- variable annuity insurance funds; and
- business development companies.
Open-Ended Funds
Nearly three-quarters of funds are open-ended mutual funds. Open-ended mutual funds allow fund sponsors to sell and redeem an unlimited number of shares on demand. The value of an open-ended mutual fund is based on the fund’s net asset value (NAV).
Over 40% of open-ended mutual funds are audited by PricewaterhouseCoopers (PwC). The three remaining Big Four firms each audit between 12% and 17% of the market. Regional firms Cohen & Co, Tait Weller & Baker, and BBD hold 6%, 4%, and 3% of the market, respectively.
Closed-Ended Funds
Just 5% of funds are closed-ended mutual funds. Closed-ended mutual funds have a fixed number of shares that are sold through an IPO. The value of a closed-ended mutual fund is based on the trading price of the fund’s shares.
PwC holds a narrow edge in closed-ended mutual fund clients with 25% of the market. Deloitte is second with 24%. The other Big Four firms, KPMG and Ernst & Young (EY), audit 20% and 17%, respectively, while Cohen & Co audits 5% and Tait Weller & Baker audits 3%.
Exchange Traded Funds
Roughly 16% of funds are exchange-traded funds (ETFs). ETFs are funds that track a basket of securities. ETFs allow investors to diversify through tradable securities.
PwC audits half of the ETF market. EY follows with 20%, Deloitte with 12%, and Cohen & Co with 9%.
Other Funds
Money market funds, variable annuity insurance, and business development companies (BDC) make up the remaining 3%, 2%, and 1% of funds.
PwC leads the money market and variable annuity insurance markets with 43% of each. Together, the Big Four audit 98% of money market funds and 99% of variable annuity insurance funds.
EY leads the BDC market with 20%, followed closely by Deloitte with 19% and international firm RSM with 15%.
This analysis uses data from theMutual Fund Auditor Engagementsdatabase, part of the newFunds + Securitiesmodule, powered by Audit Analytics.
For more information about Audit Analytics or this analysis, please contact us.
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FAQs
Internal auditors are salaried employees of mutual fund companies and other organizations. Those who are employed by public accounting firms that provide auditing services to mutual fund companies are known as external auditors.
Who are the top mutual fund auditors? ›
Data analyzed by Audit Analytics show that PwC audits 41.1 percent of all mutual funds registered with the Securities and Exchange Commission. That put it far ahead of its fellow Big Four firms, with Ernst & Young auditing 16.9 percent, Deloitte auditing 15.7 percent, and KPMG auditing 11.6 percent.
Who audits Vanguard funds? ›
PricewaterhouseCoopers LLP, Two Commerce Square, Suite 1800, 2001 Market Street, Philadelphia, PA 19103-7042, serves as the Funds' independent registered public accounting firm. The independent registered public accounting firm audits the Funds' annual financial statements and provides other related services.
Can auditors own mutual funds? ›
No "audit chain of command" person could own shares of a mutual fund if the mutual fund holds securities of the audited entity.
Who handles audits? ›
The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or at the taxpayer's home, place of business, or accountant's office (field audit).
Who issues audits? ›
The Auditing Standards Board (ASB) is the senior committee of the AICPA designated by Council to issue auditing, attestation, and quality control standards and practice guidance for performing and reporting on audit and attestation engagements for nonissuers (that is, entities not included within the jurisdiction of ...
Who are the 4 biggest auditors? ›
The Big Four accounting firms
The leading accounting firms in the world are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and Klynveld Peat Marwick Goerdeler (KPMG). The firms provide their clients with various professional services that include auditing, corporate finance, and legal advice.
Who are the top 3 auditors? ›
Baker Tilly $4.3 billion
| Firm Name | Revenue | Number of Employees |
|---|
| 1. Deloitte | $59.3 billion | 411,951 |
| 2. PwC | $50.3 billion | 328,00 |
| 3. EY | $39.9 billion | 365,399 |
| 4. KPMG | $34.64 billion | 265,000 |
6 more rowsJun 11, 2023
The Big Four are the four largest professional services networks in the world: Deloitte, Ernst & Young (EY), KPMG, and PwC. They are the four largest global accounting networks as measured by revenue.
Who audits the S&P 500? ›
These companies, as you may already know, are Deloitte, PwC, Ernst & Young, and KPMG. A staggering 100% of the Fortune 500 are audited by one of the Big 4 accounting firms.
The Public Company Accounting Oversight Board has imposed a $1 million civil penalty against PricewaterhouseCoopers and censured the firm for its audits of Merrill Lynch.
Who is the auditor for BlackRock? ›
WASHINGTON (CBS.MW) -- Mutual fund company BlackRock said Thursday it has divided its auditor services between Deloitte & Touche and Ernst & Young, ahead of new regulation that bars independent accountants from providing clients with certain nonaudit services.
How often are mutual funds audited? ›
Annual Audit. As a matter of accountability to investors, private investment funds are generally subject to annual financial statement audits. This audit requirement may be self-imposed by fund management or may exist under federal or state investment advisor regulations.
Who actually owns a mutual fund? ›
Note that mutual fund investors do not actually own the securities in which the fund invests; they only own shares in the fund itself. In the case of actively managed mutual funds, the decisions to buy and sell securities are made by one or more portfolio managers, supported by teams of researchers.
Who are mutual funds regulated by? ›
The SEBI regulates mutual funds through a series of regulations and guidelines that govern various aspects of their operations. These regulations are designed to ensure that mutual funds operate in a transparent, fair, and accountable manner, and that the interests of investors are protected.
Who is AMC auditor? ›
auditors? AMC's independent registered public accounting firm is Ernst & Young LLP.
Who regulates mutual funds? ›
In India, the Securities and Exchange Board of India (SEBI) is the primary regulatory body for the securities market, including mutual funds. The SEBI regulates mutual funds through a series of regulations and guidelines that govern various aspects of their operations.
Who regulates mutual funds in us? ›
The SEC is tasked with monitoring and enforcing mutual funds' compliance with the Investment Company Act as well as all other applicable federal securities laws and regulations.
Who does audit for Goldman Sachs? ›
Mazars, ranked tenth in the Accountancy league table of firms, will be responsible for auditing Goldman Sachs International from 2021. This includes the bank's London and Frankfurt businesses. The firm is expected to earn around $5m (£4m) in fees when it takes over from PwC.
