Big Four accounting firms

The Big Four are the four largest professional services networks in the world, offering audit, assurance, tax, consulting, advisory, actuarial, corporate finance and legal services. They handle the vast majority of audits for publicly traded companies as well as many private companies. It is reported that the Big Four audit 99% of the companies in the FTSE 100, and 96% of the companies in the FTSE 250 Index, an index of the leading mid-cap listing companies.[1]

The Big Four firms are shown below, with their latest publicly available data.

Firm Revenues Employees Revenue per employee Fiscal year Headquarters Source
Deloitte $36.8 bn 244,400 $150,573 2016 United States [2]
PwC $35.9 bn 223,468 $160,649 2016 United Kingdom [3]
EY $29.6 bn 231,000 $128,139 2016 United Kingdom [4]
KPMG $24.4 bn 173,965 $140,488 2015 Netherlands [5]

This group was once known as the "Big Eight", and was reduced to the "Big Six" and then "Big Five" by a series of mergers. The Big Five became the Big Four after the fall of Arthur Andersen in 2002, following its involvement in the Enron scandal.

Other large professional services networks include BDO, RSM, Grant Thornton, Baker Tilly and Crowe Horwath.

Legal structure

None of the Big Four firms is a single firm; rather, they are professional services networks. Each is 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. Each network has established an entity to co-ordinate the activities of the network. In one case (KPMG), the co-ordinating entity is Swiss, and in three cases (Deloitte Touche Tohmatsu, PricewaterhouseCoopers and Ernst & Young) the co-ordinating entity is a UK limited company. Those entities do not themselves perform external professional services, and do not own or control the member firms. They are similar to law firm networks found in the legal profession.

In many cases each member firm practices in a single country, and is structured to comply with the regulatory environment in that country. In 2007, KPMG announced a merger of four member firms

Ernst & Young also includes separate legal entities which manage three of its four areas: Americas, EMEIA (Europe, The Middle East, India and Africa), and Asia-Pacific. (Note: the Japan area does not have a separate area management entity). These firms coordinate services performed by local firms within their respective areas but do not perform services or hold ownership in the local entities.[6]

The figures in this article refer to the combined revenues of each network of firms.

Mergers and the big auditors

Since 1989, mergers and one major scandal involving Arthur Andersen have reduced the number of major professional-services firms from eight to four.

Big Eight

The firms were called the Big Eight for most of the 20th century, reflecting the international dominance of the eight largest firms (presented here in alphabetical order):

Most of the Big Eight originated in an alliance formed between British and U.S. audit firms in the 19th or early 20th centuries. Price Waterhouse was a UK firm which opened a U.S. office in 1890 and subsequently established a separate U.S. partnership. The UK and U.S. Peat Marwick Mitchell firms adopted a common name in 1925. Other firms used separate names for domestic business, and did not adopt common names until much later: Touche Ross in 1960, Arthur Young (at first Arthur Young, McLelland Moores) in 1968, Coopers & Lybrand in 1973, Deloitte Haskins & Sells in 1978 and Ernst & Whinney in 1979.[8]

The firms' initial international expansion was driven by the needs of British and U.S.-based multinationals for worldwide service. They expanded by forming local partnerships or by forming alliances with local firms.

Arthur Andersen had a different history. The firm originated in the United States, and expanded internationally by establishing its own offices in other markets, including the United Kingdom.

In the 1980s the Big 8, each now with global branding, adopted modern marketing and grew rapidly. They merged with many smaller firms. One of the largest of these mergers was in 1987, when Peat Marwick merged with the Klynveld Main Goerdeler (KMG) group to become KPMG Peat Marwick, later known simply as KPMG.

Big Six

Competition among these firms intensified and the Big 8 became the Big Six in 1989 when Ernst & Whinney merged with Arthur Young to form Ernst & Young in June, and Deloitte, Haskins & Sells merged with Touche Ross to form Deloitte & Touche in August.

Confusingly, in the United Kingdom the local firm of Deloitte, Haskins & Sells merged instead with Coopers & Lybrand. For some years after the merger, the merged firm was called Coopers & Lybrand Deloitte and the local firm of Touche Ross kept its original name. In the mid 1990s however, both UK firms changed their names to match those of their respective international organizations. On the other hand, in Australia the local firm of Touche Ross merged instead with KPMG.[9][10] It is for these reasons that the Deloitte & Touche international organization was known as DRT International (later DTT International), to avoid use of names which would have been ambiguous (as well as contested) in certain markets.

Big Five

The Big 6 became the Big Five in July 1998 when Price Waterhouse merged with Coopers & Lybrand to form PriceWaterhouseCoopers.

The Big 5 Accounting Firms were:

1. Ernst & Young

2. Deloitte & Touche

3. Arthur Andersen


5. PriceWaterhouseCoopers

Big Four

The Enron collapse and ensuing investigation prompted scrutiny of their financial reporting, which was audited by Arthur Andersen. Arthur Andersen was eventually indicted for obstruction of justice for shredding documents related to the audit in the 2001 Enron scandal. The resulting conviction, though later overturned, still effectively meant the end for Arthur Andersen. Most of its country practices around the world have been sold to members of what is now the Big Four—notably Ernst & Young globally; Deloitte & Touche in the UK, Canada, Spain, and Brazil; and PricewaterhouseCoopers (now known as PwC) in China and Hong Kong.

2002 saw the passage of the Sarbanes–Oxley Act into law in the US. It aims to enforce strict compliance to rules for both businesses and their auditors.

In 2010 Deloitte with its 1.8% growth was able to beat PricewaterhouseCoopers with its 1.5% growth to gain first place and become the largest firm in the industry. In 2011, PwC re-gained the first place with 10% revenue growth. In 2013, these two firms still claim the top two spots with only $200 million or 0.5% revenue difference. However, Deloitte has seen faster growth than PwC over the last few years (largely due to acquisitions) and reclaimed the title of largest of the Big Four in Fiscal Year 2016.

Branding List

A year at the end indicates year of formation through merger or adoption of single brand name.


Tax avoidance

According to Australian taxation expert Toshaan kakkar, the Big Four are "the masterminds of multinational tax avoidance and the architects of tax schemes which cost governments and their taxpayers an estimated $US1 trillion a year". At the same time they are advising governments on tax reforms, they are advising their multinational clients how to avoid taxes. [11][12]

Policy issues concerning industry concentration

In the wake of industry concentration and individual firm failure, the issue of a credible alternative industry structure has been raised.[13] The limiting factor on the growth of additional firms is that although some of the firms in the next tier have become quite substantial, and have formed international networks, effectively all very large public companies insist on having a "Big Four" audit, so the smaller firms have no way to grow into the top end of the market.

Documents published in June 2010 show that some UK companies' banking covenants required them to use one of the Big Four. This approach from the lender prevents firms in the next tier from competing for audit work for such companies. The British Bankers' Association said that such clauses are rare.[14] Current discussions in the UK consider outlawing such clauses.

In 2011,The UK House of Lords completed an inquiry into the financial crisis, and called for an Office of Fair Trading investigation into the dominance of the Big Four.[15] It is reported that the Big Four audit all but one of the companies that constitute the FTSE 100, and 240 of the companies in the FTSE 250, an index of the leading mid-cap listing companies.[1]

In Ireland, the Director of Corporate Enforcement, in February 2011 said, auditors "report surprisingly few types of company law offences to us", with the so-called "big four" auditing firms reporting the least often to his office, at just 5pc of all reports.[16]

Global member firms

Region Deloitte Touche Tohmatsu PwC Ernst & Young KPMG
Australia Deloitte Australia[17] PricewaterhouseCoopers Ernst & Young KPMG
Argentina Deloitte & Co. S.R.L Pricewaterhouse & Co. S.R.L. Ernst & Young KPMG
Bangladesh None Pricewaterhouse & Co. Limited A. Qasem & Co

EY Bangladesh

Rahman Rahman Huq, KPMG in Bangladesh
Brazil Deloitte PwC EY KPMG
Bulgaria Deloitte PwC EY KMPG
China Deloitte Hua Yong PricewaterhouseCoopers Zhong Tian Ernst & Young Hua Ming KPMG Hua Zhen
Egypt Kamel Saleh Mansour & Co. Allied for Accounting and Auditing (Emad Ragheb) Hazem Hassan
El Salvador DTT El Salvador, S.A. de C.V. PricewaterhouseCoopers El Salvador Ernst & Young El Salvador, S.A. de C.V. KPMG, S.A.
Finland Deloitte & Touche Oy PricewaterhouseCoopers Oy Ernst & Young Oy KPMG Oy Ab
Ghana Deloitte PwC EY KPMG
Hong Kong Deloitte PricewaterhouseCoopers Ernst & Young KPMG
India Deloitte Haskins & Sells, Deloitte Haskins & Sells LLP, P C Hansotia, C C Chokshi & Co, S.B. Billimoria, M.Pal & Co., Fraser & Ross and Touche Ross & co and A.F Ferguson, Deloitte Touche Tohmatsu, Deloitte & Touche Consulting, Deloitte Audit & Enterprise Risk Services Price Waterhouse, Price Waterhouse & Co., Lovelock & Lewes, and Dalal & Shah, PricewatershouseCoopers, PricewaterhouseCoopers Service Delivery Centre S.R.Batliboi & Co. LLP, S.R.Batliboi & Associates LLP, S.V.Ghatalia & Associates LLP, S R B C & CO LLP, Ernst & Young LLP, PDS Legal KPMG (Registered), KPMG India Private Limited, KPMG Advisory Services Pvt Ltd, BSR & Co LLP, BSR & Associates LLP, BSR And Company, BSR & Co., BBSR and Co., BSSR & Co., BSR And Associates, Advaita Legal, SMA & Associates
Indonesia KAP Osman Bing Satrio & Eny KAP Tanudiredja, Wibisana, Rintis & Rekan KAP Purwantono, Sungkoro & Surja KAP Sidharta Widjaja & Rekan
Israel Deloitte Brightman Almagor Zohar Kesselman & Kesselman, PwC Israel Kost, Forer, Gabbay & Kasierer (Ernst & Young Israel) KPMG Somekh Chaikin
Italy Deloitte Touche Tohmatsu PricewaterhouseCoopers Reconta Ernst & Young SpA, Ernst & Young Financial Business Advisors SpA, KPMG
Japan Deloitte Touche Tohmatsu
Kansa Houjin Tohmatsu
PricewaterhouseCoopers Aarata
Aarata Kansa Houjin

PricewaterhouseCoopers Kyoto

Ernst & Young ShinNihon LLC
ShinNihon Yugen-sekinin Kansa Houjin
KPMG AZSA LLC (formerly KPMG AZSA & Co.)
Azsa Kansa Houjin
Jordan Deloitte Touche (M.E) PwC Ernst & Young KPMG
Kazakhstan Deloitte PwC EY KPMG
Kenya Deloitte & Touche (E.A) PwC Ernst & Young KPMG
Kyrgyzstan Deloitte - EY KPMG
Lebanon Deloitte Touche (M.E) PwC Ernst & Young KPMG PCC
Malaysia Deloitte KassimChan PricewaterhouseCoopers Ernst & Young KPMG
Malta Deloitte PwC EY Malta KPMG
Mexico Galaz, Yamazaki, Ruiz Urquiza, S.C. PricewaterhouseCoopers México Mancera S.C. KPMG Cárdenas Dosal, S.C.
Mongolia Deloitte Onch PwC Ernst & Young Mongolia KPMG
Morocco Deloitte Touche (M.E) PwC Ernst & Young KPMG
Nigeria Akintola Williams Deloitte PwC Nigeria Ernst & Young KPMG
Pakistan Deloitte Yousuf Adil A. F. Ferguson & Co. EY Ford Rhodes KPMG Taseer Hadi & Co.
Palestinian Territories Deloitte Touche (M.E) PwC Ernst & Young none
Philippines Navarro Amper & Co (formerly Manabat Delgado Amper & Co.) Isla Lipana & Co. SyCip Gorres Velayo & Co. R.G. Manabat & Co. (formerly Manabat Sanagustin & Co.)
Poland Deloitte PwC EY KPMG
Romania Deloitte Audit S.R.L., Deloitte Tax S.R.L., Deloitte Consultanta S.R.L., Deloitte Evaluare S.R.L. Deloitte Fiscal Representative S.R.L. and Reff & Associates SCA (jointly referred to as "Deloitte Romania")[18] PricewaterhouseCoopers Audit SRL, PricewaterhouseCoopers Tax Advisors & Accountants SRL, PricewaterhouseCoopers Management Consultants SRL, PricewaterhouseCoopers Business Recovery Services IPURL, PricewaterhouseCoopers Servicii SRL[19] Ernst & Young Romania SRL[20] KPMG Romania S.R.L.[21]
Saudi Arabia Deloitte & Touche Bakr Abulkhair & Co PricewaterhouseCoopers LLP Ernst & Young Saudi Arabia KPMG Al Fozan & Partners
South Africa Deloitte PwC EY KPMG
South Korea Anjin LLC Samil LLC Hanyoung LLC Samjong LLC
Sri Lanka SJMS Associates (independent correspondent firm) PwC Ernst & Young KPMG
Sweden Deloitte Touche Tohmatsu Öhrlings PricewaterhouseCoopers Ernst & Young KPMG
Syria Deloitte (M.E) - Nassir Tamimi Chartered Accountant PricewaterhouseCoopers Abdul Kader Hussarieh and partners Mejanni & Co. Chartered Accountants and Consultants LLC
Thailand Deloitte Touche Tohmatsu Jaiyos PricewaterhouseCoopers Ernst & Young KPMG Phoomchai
Taiwan Deloitte PricewaterhouseCoopers Taiwan Ernst & Young KPMG
Turkey DRT Bagimsiz Denetim ve S.M.M. A.S. Basaran Nas Bagimsiz Denetim ve SMMM A.S. Güney Bağımsız Denetim ve S.M.M. A.Ş., Kuzey Y.M.M. Denetim A.Ş., Ernst Young Kurumsal Finansman Danışmanlık A.Ş., BEY S.M.M. A.Ş. Akis Bagimsiz Denetim ve S.M.M. A.S.
Uzbekistan Deloitte Touche Tohmatsu ASC PricewaterhouseCoopers Young Anvars
Venezuela Lara Marambio & Asociados - Deloitte Espiñeira Pacheco & Asociados - PricewaterhouseCoopers EY Rodriguez Velasquez & Asociados - KPMG
Uganda Deloitte PwC EY KPMG
Zimbabwe Deloitte PwC EY KPMG
New Zealand Deloitte PwC EY KPMG

See also


  1. 1 2 Mario Christodoulou (2011-03-30). "U.K. Auditors Criticized on Bank Crisis". Wall Street Journal.
  2. "2016 Global Report - Deloitte - Global Reports, insights, services, and solutions". Deloitte. Retrieved 7 September 2015.
  3. PricewaterhouseCoopers. "Global Annual Review 2016". PwC.
  5. "2015 KPMG International Annual Review". Retrieved 10 December 2015.
  6. "Legal Disclaimer". Retrieved 2016-10-11.
  8. "What's in a name: Firms' simplified family trees on the web".
  10. Alison Leigh Cowan (1989-12-05). "Deloitte, Touche Merger Done". New York Times.
  11. "'Tax avoidance' masters revealed". The NEWDAILY. 2016-07-11.
  12. "'Big Four' audit firms never examined over illegal tax plans". The Independent. 2016-01-18. Regulators fail to act as they are dominated by the companies they are supposed to police, say critics
  13. "Too Big to Fail: Moral Hazard in Auditing and the Need to Restructure the Industry Before it Unravels".
  14. "Big-Four-only clauses are rare: BBA". Archived from the original on 2010-06-21.
  15. "Auditors criticised for role in financial crisis". Financial Times.
  17. "About Deloitte Australia". Deloitte Australia. 20 February 2015. Retrieved 6 October 2015.
  19. PricewaterhouseCoopers. "About site provider". PwC.
  20. "Members :: CCE-R". Archived from the original on 2014-08-10.
  21. "Home - KPMG - RO".

External links

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