The coronavirus is increasing in its severity across the globe. How will this impact the big four accounting firms?

big 4 corona virus update

big 4 coronavirus update

Employees Will Work Remotely

People who work for the big four won’t have to go into the office. I’m sure the big 4 accounting firms have all sent out emails telling employees to stay home, and I’m sure their clients have done the same.

Hiring

Big 4 will no doubt freeze hiring or lessen it severely. How will you see the impact of this.

Deloitte hired 90,000 professionals in 2019.

KPMG hired about 55,000 professionals in 2018.

Big 4 Compensation Will Go Down

Raises will remain flat. Bonuses will most likely go away for everyone except some partners.

Revenues Will Go Down

Revenues for the big 4 accounting firms will without a doubt go down. It will be interesting to see how much lower the revenues go down. The economy is going to go in recession because you have too many companies shut down for an extended period of time. This means that companies will not pay consultants or advisors more than they have too. I’m sure they will also look to reduce fees during this time period.

In order for the big 4 to keep revenues up, they will have to truly provide their clients ton of value during this time period. They can’t decrease value during this time period, or their clients will work to keep fees lower for the long term as they did after the financial crisis.

Client Engagements will change

There are some good things that will happen for the big 4 accounting firms from the coronavirus. Clients will be looking at their tax situations from this virus. It will no doubt throw many of them into a loss for 2020. They will be looking at the tax benefits from that loss and how to turn that tax loss into immediate cash.

There are also government programs around the world meant to help businesses last through this event. The big 4 will be consulting their clients on how to take advantage of these measures.

Additionally, the big 4 will gain engagements about supply chain management as more companies will want to rely less on China and other high risk countries.

As far as audit, the big 4 will have to be careful about auditing their clients going forward. They have to make sure that their clients are disclosing the full impact of the coronavirus on their financial statements. They might also have to issue a going concern on some of their clients, and some of their clients might go out of business.