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, PricewaterhouseCoopers, KPMG, Ernst & Young 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 Big Four’s embrace of the market is no surprise; it makes sense for firms to follow the money and accept buzzy clients in emerging industries. But a disproportionate number of those new companies come with financial reporting red flags compared to the broader public market, according to investment research software firm Bedrock AI. Read more.
