Major Accountancy Firms: The Big 4!
The 'Big 4' is a term used to refer to the four largest international accountancy and professional services firms, as shown in the table below.
These certified public accounting (CPA) firms handle the vast majority of audits for publicly traded companies as well as many private companies. This group was originally known as the "Big 8", but was reduced to the "Big 5" by a series of mergers in the late 80s and 90s. The Big 5 then became the Big 4 after the near-demise of Arthur Andersen in 2002, following its involvement in the Enron Scandal.
| Firm | Employees | Revenue |
|---|---|---|
| Deloitte Touche Tohmatsu | 165,000 | $27.4bn |
| Ernst & Young | 130,000 | $24.5bn |
| KPMG | 123,000 | $19.8bn |
| PricewaterhouseCoopers | 146,700 | $28.2bn |
Each of the Big Four accounting firms is in fact a network of firms, owned and managed independently, which have entered into agreements with other member firms in the network to share a common name, brand and quality standards. In two cases, those of PricewaterhouseCoopers and Ernst & Young, the co-ordinating entity is a UK limited company, and in the other 2 cases (KPMG and Deloitte Touche Tomatsu), the co-ordinating entity is Swiss. Those entities do not themselves practise accountancy, and do not own or control the member firms.
In addition to performing audits and other assurance services, the Big 4 provide tax advising and various management services. In most cases each member firm practises in a single country, and is structured to comply with the regulatory environment in that country.
