The Big 4 Accounting Firms are:
What are the big four accounting firms?
The Big Four Accounting Firms are PwC, Deloitte, EY and KPMG. They are the top 4 accounting firms in the world. They are well known for being the top audit firms in the world.
The big four accounting firms are the largest professional service firms in the world. The reason they have this designation is because of the number of employees they have to offer professional services to clients.
The professional services they offer are audit services, tax services and advisory services. For each firm, audit services provides their largest source of revenue.
Why are the 4 big public accounting firms so important?
The reason everyone knows who PwC, Deloitte, EY and KPMG are is because they have a monopoly on the audit of public companies. A public company is a company that is listed on one of the major stock exchanges around the globe. In order to be listed on those exchanges, companies need to have audited financial statements. Most investors prefer to have the big four audit those financial statements because of the prestige.
The big four audit firms offer something that mid tier accounting firms are not able to offer. They offer a large network of member firms around the world. What this means is that they have partnerships with firms across the world that are able to service their clients. The largest companies in the world operate in over a 100 countries, so they expect their advisors to have offices there as well. The big 4 are able to easily offer this to their clients. They all have over 150,o00 employees while the mid-tier accounting firms all have less than 100,000 employees. Visit our top 10 accounting firms pages to learn who the largest mid-tier accounting firms are in the world.
Another reason they want the big audit firms to audit them is because they have enough capital in case something goes wrong. They want to be able to have some recourse if the financial statements aren’t audited correctly. Since the top accounting firms make billions of dollars each year, they have enough capital in case a shareholder wants to sue them.
For example, when Enron went under, many people sued Arthur Andersen. Arthur Andersen was not able to survive that lawsuit because their level of involvement in the fraud was seen as too great.
PwC formerly known as Pricewaterhousecoopers is one of the largest of the 4 big public accounting firms. They made $35.9 billion in revenue for the fiscal year ended 2016.
The number of employees working at PwC was 223,000 as of their latest fiscal year.
PwC has over 400 clients out of the 500 companies that are in the Fortune 500.
What is Ernst & Young. Ernst & Young PVT LTD is a professional services firm composed of thousands of public accountants that focus primarily on auditing. The number of employees working at Ernst and Young is well over 200,000.
EY was formed in 1989 when Ernst and Whinney and Arthur Young & Co. merged.
E&Y is headquartered in the United Kingdom. Their headquarters are located at 6 More London Place, London SE1.
Deloitte is another one of the largest public accounting firms in the world. They were formed from the merger of Deloitte Haskins & Sells and Touche Ross in 1989.
They are the largest professional services firm as it relates to revenue for the fiscal year ended 2016. They earned $36.8 billion in 2016. In 2015, Deloitte’s Revenue was $35.2 billion.
KPMG was founded in 1987 when Peat Marwick Mitchell and Co and Klynveld Main Goerdler merged to form one firm.
What is the full form of KPMG? KPMG stands for Klynveld Peat Marwick and Goerdler.
KPMG earned $25.42 billion in 2016. This makes them the fourth largest public accounting firm in the world. The number of employees working at KPMG is 188,982 employees for the fiscal year ended 2016.
Big 4 Accounting Firms Ranking
Are you interested in learning where the accounting firms rank in terms of revenue? You can learn about where the largest accounting firms rank in terms of revenue for 2016 and 2015 in the links provided below.
In order to learn about the four big accounting firms you will have to learn about their history. Before they became the big 4 accounting firms, they were the Big 5 Accounting firms. Before they were the big 5 accounting firms, they were the big eight accounting firms.
Big 5 Accounting Firms
The 5 big accounting firms predated the big four accounting firms. They were the largest accounting firms until 2002. The big 5 accounting firms were Ernst & Young, Deloitte & Touche, Arthur Andersen, KPMG and Pricewaterhouse coopers.
They ceased being the big five when Arthur Andersen imploded due to fraud related to Enron.
Do you have to work at the big 4 to have a successful career in accounting?
Now that we know who the top public accounting firms are lets discuss whether you have to work there to be successful. Most people want to know about the big 4 accounting firms because they hear about them when they investigate a career in accounting. They are all over the internet and colleges trying to recruit employees. You do not have to work at the big 4 to be successful in accounting, but your career will be a lot easier if you do. Many employers have great respect for anyone that has a big four audit firm on their resume. This is because people know what it takes to be a big 4 accountant.
Being a big 4 accountant means dealing with long hours and tough personalities. It means dealing with tough clients. You have to be willing to do anything at a big four company. You have to travel a lot and sometimes you don’t know when you will be traveling. The work is not easy and requires a lot of thought. The more years you spend in the big 4; the more respect people have for you.
In conclusion, you do not have to work in public accounting to be successful as an accountant, but it will make your career success much easier.
Big 8 Accounting Firms
The 8 big accounting firms predated the big five accounting firms. The phrase was used to the largest public accounting firms in the world until 1989. They were no longer referred to the big 8 after a series of mergers. The big eight were:
- Arthur Andersen
- Arthur Young
- Deloitte Haskins and Sells
- Ernst & Whinney
- Peat Marwick Mitchell
- Price Waterhouse
- Touche Ross
- Coopers & Lybrand
Top 10 Accounting Firms
The big four public accounting firms are obviously the largest accounting firms in the world, but who are the other largest accounting firms in the world? Visit our Top 10 Accounting Firms page to learn more.