The big four firms dominate audit of listed companies on Ghana Stock Exchange

The four biggest audit firms in Ghana, namely: Deloitte, Ernst & Young (EY), KPMG and PWC, dominated the audit of the biggest companies listed on the Ghana Stock Exchange based on the 2019 audited financial reports published by the Ghana Stock Exchange and on the website of the listed companies as required by law.

The big four (4) audit firms earned approximately GHS17.4 million from the audit of 23 companies. Three (3) of these Ghanaian companies are components of a group. The total market capitalisation of these 23 companies is GHS 53.9 billion out GHS 56.8 billion for 41 listed companies on the Ghana Stock Exchange as December 2019.

The analysis of the data available shows that PWC had the biggest market share of audit fees earned by the four (4) audit firms with one audit client paying an audit fee that is more than the total audit fee for each of the other 3 audit firms. Ernst and Young came in second, followed closely by KPMG in third and Deloitte in fourth.

The 23 companies audited by the big 4 firms which accounted for 95% of the total market capitalisation include: AngloGold Ashanti Limited, Tullow Oil PLC, Golden Star Resources Limited, Access Bank Ghana, Agricultural Development Bank, Societe Generale Ghana Limited, Aluworks Limited, CalBank PLC, Cocoa Processing Company and Enterprise Group Limited.

The others are Republic Bank (Ghana) Limited, Standard Chartered Bank Ghana Limited, Total Petroleum Ghana Limited, Unilever Ghana Limited, Benso Oil Palm Plantation Limited, Ecobank Ghana Limited, Fan Milk Limited, Guinness Ghana Breweries Limited, Mechanical Lloyd Company Plc., MTN Ghana, Ghana Commercial Bank Limited, PZ Cussons Ghana Limited and SIC Insurance Company Limited.

PWC earned approximately GHS 7.1 million from auditing seven (7) out of the twenty three (23) companies audited by the big 4 firms. The earnings came from ICT, Finance, Food and Beverage, Mining, Distribution and Agriculture. The ICT contributed 50.7% (GHS 4.34 million) of the total audit fee from the seven (7) companies audited which is MTN Ghana. Finance industry contributed 18% (GHS 1.3 million) coming from the audit of Ecobank Ghana Limited.

Industry GHS'000
AGRICULTURE 148
FINANCE 1,289
FOOD AND BEVERAGE 421
DISTRIBUTION 110
ICT 4,335
MINING 840
TOTAL 7,143

The seven companies include, Benso Oil Palm Plantation Limited, Ecobank Ghana Limited, Fan Milk Limited, Guinness Ghana Breweries Limited, Mechanical Lloyd Company Plc., MTN Ghana and Golden Star Resources Limited.

Ernst and Young came second in earnings, auditing just four (4) companies out of the twenty three (23) companies with earnings of GHS 3.8 million in 2019. Their share of earnings came from only the finance and mining industries with finance industry contributing 56% (GHS 2.1 million) while the mining industry provided 44% (GHS 1.7 million).

EY was the biggest gainer in the finance industry with 34% of the total revenue available as a result of auditing three (3) out of the eight (8) banks listed on the stock exchange followed by KPMG with 23.1% in second also auditing 3 banks, Deloitte in third with 22.9% for auditing only 1 bank with PWC coming fourth earning 20% for also auditing only 1 bank. The earning from the mining industry came as part of a group audit of AngloGold Ashanti Limited.

Industry GHS'000
FINANCE 2127
MINING 1,680
TOTAL 3,807

The companies audited by EY include, Access Bank (Ghana) Plc, Agricultural Development Bank, Societe Generale Ghana Limited and Golden Star Resources Limited.

KPMG

KPMG came third on the earnings list with a total earning of GHS 3.4 million out of the total earnings of GHS17.4 million. KPMG audited eight (8) out of the twenty three (23) companies being analysed. KPMG has the highest number among the big 4 followed by PWC with seven (7) and four (4) each for EY and Deloitte respectively.

The finance industry gave KPMG the highest earning of 43% (GHS 1.5 million) for auditing 3 out of the 8 banks listed, followed by insurance with 25%. Only KPMG and Deloitte have audit clients from the insurance industry with Enterprise Insurance paying KPMG GHS0.85 million while SIC Insurance paid Deloitte GHS 0.33m. Enterprise had GHS 280 million market capitalisation and SIC had only GHS 15.7 million.

Industry GHS'000

MANUFACTURING 537

FINANCE 1,462

FOOD AND BEVERAGE 207

DISTRIBUTION 378

INSURANCE 853

TOTAL 3,437

The companies audited by KPMG include, Aluworks Limited, CalBank PLC, Cocoa Processing Company, Enterprise Group Limited, Republic Bank (Ghana) Limited, Standard Chartered Bank Ghana Limited, Total Petroleum Ghana Limited, Unilever Ghana Limited

DELOITTE

The fourth and final place was taken by Deloitte who audited only four (4) out of the twenty three (23) companies and earned GHS 3 million with the highest earning coming from the finance industry through the audit of GCB Bank Limited (GHS1.45 million).
The audit fee paid by GCB Bank to Deloitte was the highest among the eight (8) banks audited by the 4 firms. Ecobank Ghana Limited fee of GHS1.3 million to PWC came second. Deloitte also earned GHS 1.12 million from Tullow but will lose that revenue to EY in during the 2020 audit period because EY has been appointed as the new auditor for the Tullow group.

Industry GHS'000

FINANCE 1,448

INSURANCE 330

MINING 1,120

MANUFACTURING 136

TOTAL 3,034

The companies audited by Deloitte include, Tullow Oil PLC, Ghana Commercial Bank Limited, PZ Cussons Ghana Limited, SIC Insurance Company Limited

Author, Joshua Bosoka, is a results-driven finance and accounting expert offering over ten (10) years of success in leading financial, accounting and auditing management activities at different industries and organisations both local and international.

He has been getting into writing and blogging more to stay sane during this COVID period.

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