A Look Into the Big 4 Accounting Firms
The “Big 4”
The big 4 accounting firms lead the pack in terms of their auditing and accounting services which include things like taxation services risk assessment and control, external audit, etc. Not only do they provide excellent auditing and accounting services but they also offer massive employment opportunities to auditors and accountants in their many different offices located all over the world.
These big 4 accounting firms are the very best at what they do and are constantly involved in a race as to who can provide the best services and post the biggest revenue by the end of the fiscal year. It is no small wonder why these top 4 often end up competing for the top slots and this is especially true for the top two.
Interesting History of the Big 4 Accounting Firms
This list used to be the Big 8 but several mergers and dissolutions whittled the number down to just the big 4 accounting firms. It was by way of mergers and dissolutions that the number was reduced to what it is now. The mergers that took place to make the final list are mentioned below but one company is not mentioned and it is Arthur Anderson. This company’s failure is credited to its involvement with that Enron Scandal that shook the US and the world several years back. The company took such a big blow that they have been unable to stage a comeback to become the massive accounting firm that they were for so many years. It is interesting to note how the top accounting firms would combine their business and come up with brand new firms that would dominate the world in terms of services, employment, and many more.
The Big 4 Firms
This accounting firm has been in business for the last 100 years providing only the most excellent and varied services to its clients. It has been on the list of the big 4 accounting firms for several decades now. The company started back in England during the Industrial Revolution. It sparked a whole new type of enterprise that was able to raise capital simply by selling equities to the public. The GWR or the Great Western Railway was one of the earliest joint stock companies and was also the most famous. When the price declined in 1849, they turned to William Welch Deloitte, a public accountant, so he could audit the company. This was the move that started it all and would start a series of events and mergers that would lead to the formation of Deloitte as it is known today.
- Audit and enterprise risk services, consulting, tax, financial advisory services, Deloitte growth enterprise services, and featured services.
- Ranked 1st with a revenue of $32.4 billion.
- Employs 203,000 employees in 150 countries.
- Headquarters are located in NY, NY.
PwC is the 2nd largest accounting services provider in the world. It is relatively younger than Deloitte and other firms since it was formed back in 1998. It didn’t really start out as PwC but rather, it was the fruit of a merger that took place between two other leading firms offering accounting services–Coopers & Lybrand and Price Waterhouse. The merger took place when both accounting firms decided on the merger so that they could dedicate themselves provide services that were of value to their clients while working on offering and ensuring good relations with their clients and customers. There are PwC firms operating in countries all over the world. They are independently owned firms but still work to uphold the standards set in place by PwC. It used to rank first in the world in terms of revenue but was overtaken by Deloitte last 2013.
- Tax, Sustainability & climate change, Legal, IFRS, Human resources, Family business services, Audit and assurance, and Advisory services
- Ranked 2nd around the world with a revenue of $31.1 billion.
- Counts 184, 285 partners, client service staff, and partner service staff under its name.
- Has 776 offices spread out in 157 countries.
- The company has headquarters in London and in NY, NY.
EY (Ernst & Young)
This is another company that was formed by way of a merger but unlike PwC, this merger happened way back. In the year 1989, Arthur Young merged with Ernst & Whinney and this resulted in the Ernst & Young that the world knows today. Like any company that has been running for a long time, the company has a long history of providing only the very best services and this means they choose people who are equipped with only the very best skills and those that have integrity, enthusiasm, motivation, teamwork, professionalism, and respect – the very values that drive the accounting firm. The company also provides training and development for the professional growth of their employees.
- Assurance, tax, advisory, specialty services.
- Ranked 3rd in the world with a revenue of $25.8 billion.
- Has 190,000 people in more than 700 offices located in over 150 countries.
- Global headquarters are located on London
KPMG (Klynveld Peat Marwick Goerdeler)
The history of this company can be traced 3 centuries to the names of its founding members whose initials form KPMG. The current company was formed back in 1987 when Peat and Marwick International and Klynveld Main Goerdeler merged together with their individual member firms. The K stands for Klynveld for Piet Klynveld who founded the Klynveld Kraayenhof & Co. accounting firm in Amsterdam way back in 1917. The P stands for William Barclay Peat who was the founder of the William Barclay Peat & Co. accounting firm in London. That was in the year 1870. The M is for James Marwick who was the founder of Marwick, Mitchell & Co. accounting firm together with Roger Mitchell in 1897. The G is for Dr. Reinhard Goerdeler who served as the chairman of Detusche Treuhand-Gesellscahft. He later became the chairman of KPMG.
- Tax services include domestic tax, indirect tax, international tax, and payroll services.
- Advisory services include management consulting, risk consulting, and transactions & restructuring.
- Global services include advisory, capability hubs, and tax professional services.
- Ranked 4th with a revenue of $23,042 billion.
- The company employs 155,000 professionals in 151 countries.
- Headquarters are located in Amsterdam, North Holland.