Who are the “Big 4”? And why is everyone talking about them?
In the world of business and finance, the "Big 4" firms—Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG)—hold a formidable presence. They are the four largest accounting firms in the world by revenue, amassing yearly revenues of at least $25 billion each in 2018. In addition to their size, they are known for their diverse service offerings, global influence, and the skilled professionals they attract. The Big 4 audits the majority of all publicly traded companies.
Up until the late 1980’s the major accounting firms were known as the Big 8: Arthur Andersen, Arthur Young, Coopers & Lybrand, Ernst & Whinney (later Ernst & Young), Deloitte Haskins & Sells, KPMG Peat Marwick (later KPMG), Price Waterhouse, and Touche Ross. These firms underwent a series of mergers until the late 1990s, and Arthur Andersen collapsed in 2002 following the Enron scandal. These events led to the current state of the industry, and the Big 4 as we know them.
What do they do?
The Big 4’s professional services are primarily divided into three categories: Assurance/Audit, Tax, and Advisory.
Assurance/Audit services involve checking the accuracy of financial statements for companies, providing assurance to stakeholders about the company's financial health.
Tax services include advising on tax-related issues, helping companies navigate complex tax laws, and ensuring compliance with regulations.
Advisory services cover a broad spectrum, from helping companies improve their performance through strategy and operations consulting to providing risk consulting and financial advisory services.
What sets them apart?
Despite offering similar services, each of the Big 4 firms has its unique strengths and areas of focus.
Deloitte, the largest of the bunch, is known for its strong consulting practice. It is the go-to-firm for firms seeking advice regarding new technologies and digital transformation. The quality of their tech-driven strategies sets them apart in the industry.
PwC, has a dominant position in the field of auditing. Many Fortune 500 companies trust PwC with their financial reporting due to their reputation for reliable and high-quality auditing services. Their high-profile clientele includes most of the world’s largest companies. They have a robust tax practice and are recognised for their work in consulting for mergers and acquisitions.
EY is globally recognised for its leadership in tax services. EY is respected for its comprehensive understanding of tax laws and technical expertise. EY commits to supporting entrepreneurship through initiatives like the EY Entrepreneur of the Year program, which celebrates innovative business leaders around the world. They are also known for their emphasis on diversity and inclusiveness.
KPMG maintains a strong position in both audit and advisory services. The firm has a significant footprint in industries like financial services, and their industry knowledge enables them to provide tailored services to clients within these sectors.
All of these firms offer comprehensive professional services, are highly competitive, and strive for excellence in all areas of their work.
In conclusion, the Big 4 firms—Deloitte, PwC, EY, and KPMG—are major players in the professional services industry. Understanding the role and significance of these firms can be an excellent starting point for rewarding careers in business. With their global reach and industry influence, these firms offer unparalleled opportunities for learning, growth, and professional development.
In the world of business and finance, the "Big 4" firms—Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG)—hold a formidable presence. They are the four largest accounting firms in the world by revenue, amassing yearly revenues of at least $25 billion each in 2018. In addition to their size, they are known for their diverse service offerings, global influence, and the skilled professionals they attract. The Big 4 audits the majority of all publicly traded companies.
Up until the late 1980’s the major accounting firms were known as the Big 8: Arthur Andersen, Arthur Young, Coopers & Lybrand, Ernst & Whinney (later Ernst & Young), Deloitte Haskins & Sells, KPMG Peat Marwick (later KPMG), Price Waterhouse, and Touche Ross. These firms underwent a series of mergers until the late 1990s, and Arthur Andersen collapsed in 2002 following the Enron scandal. These events led to the current state of the industry, and the Big 4 as we know them.
What do they do?
The Big 4’s professional services are primarily divided into three categories: Assurance/Audit, Tax, and Advisory.
Assurance/Audit services involve checking the accuracy of financial statements for companies, providing assurance to stakeholders about the company's financial health.
Tax services include advising on tax-related issues, helping companies navigate complex tax laws, and ensuring compliance with regulations.
Advisory services cover a broad spectrum, from helping companies improve their performance through strategy and operations consulting to providing risk consulting and financial advisory services.
What sets them apart?
Despite offering similar services, each of the Big 4 firms has its unique strengths and areas of focus.
Deloitte, the largest of the bunch, is known for its strong consulting practice. It is the go-to-firm for firms seeking advice regarding new technologies and digital transformation. The quality of their tech-driven strategies sets them apart in the industry.
PwC, has a dominant position in the field of auditing. Many Fortune 500 companies trust PwC with their financial reporting due to their reputation for reliable and high-quality auditing services. Their high-profile clientele includes most of the world’s largest companies. They have a robust tax practice and are recognised for their work in consulting for mergers and acquisitions.
EY is globally recognised for its leadership in tax services. EY is respected for its comprehensive understanding of tax laws and technical expertise. EY commits to supporting entrepreneurship through initiatives like the EY Entrepreneur of the Year program, which celebrates innovative business leaders around the world. They are also known for their emphasis on diversity and inclusiveness.
KPMG maintains a strong position in both audit and advisory services. The firm has a significant footprint in industries like financial services, and their industry knowledge enables them to provide tailored services to clients within these sectors.
All of these firms offer comprehensive professional services, are highly competitive, and strive for excellence in all areas of their work.
In conclusion, the Big 4 firms—Deloitte, PwC, EY, and KPMG—are major players in the professional services industry. Understanding the role and significance of these firms can be an excellent starting point for rewarding careers in business. With their global reach and industry influence, these firms offer unparalleled opportunities for learning, growth, and professional development.
