“Big Four” accounting audit firms

The “Big 4” is a term used to describe the four biggest accounting firms (Deloitte, PwC, E&Y, and KPMG). These firms are the largest providers of accounting services in the world and offer the top accounting jobs for new accounting graduates. The Big 4 refers to the four biggest accounting firms globally, as measured by revenue. It used to be the Big 8 before a series of mergers and one spectacular collapse saw the number reduced by half. It has since built these practices back up in a similar fashion to the other big four firms and offers a full range of professional services.

  • One often overlooked aspect of the partnership is the pension which may be one of the best benefits.
  • These certified public accounting (CPA) firms perform a majority of the audits required of U.S. corporations having stock that is publicly traded.
  • CPAB has begun naming firms that are under enforcement actions, but not ones that have an issue with significant findings.
  • In 2013 the firm reported their revenue at $25.8 billion and an annual growth rate of 5.8%.

Which means it hosts a very culturally diverse work environment and works with companies that are not yet as successful. Ernst & Young are continually rated in the top five in DiversityInc Magazine’s top 50 places to work. Having so many areas of interest, anyone in the accounting trade is sure to find a position that suites their specialization. Like Deloitte, PwC has maintained a steady growth in revenue over the past 10 years.

If you’re interested in finding out more about the big 4 accounting firms, or any other aspect of your business finances, then get in touch with our financial experts. Find out how GoCardless can help you with ad hoc payments or recurring payments. The last major change to the fortunes of the global accounting firms followed the collapse of the Enron corporation which was audited by Arthur can you work 60 hours & not get paid overtime Anderson. Although their growth rate is the lowest in the top four, they are still growing, merging, acquiring other firms, and taking on new partners. KPMG is last of the big four accounting firms with more than 670 offices located in over 150 countries. The firm was originally established in 1911 when William Barclay Peat & co. merged with Marwick Mitchell & Co. to form Peat Marwick.

Budget 2024: Childcare cuts welcome but public model needed for gender equality- National Women’s Council

In 2013 the firm reported their revenue at $25.8 billion and an annual growth rate of 5.8%. This is the highest growth rate the company has seen over the past 5 years. Critics say that the accounting firms do not want to ask tough questions of their paying clients or assiduously investigate something suspicious on their books. In the 1980s the Big Eight, each with global branding, adopted modern marketing and grew rapidly. In 1987, Peat Marwick merged with the Klynveld Main Goerdeler group to become KPMG Peat Marwick, later known simply as KPMG. Note that this was not the result of a merger between any of the Big Eight.

There’s nothing inherently “wrong” with it – to some people it satisfies as an end goal because it’s realistic and achievable. If you’re an overachiever, you wouldn’t settle for Big 4 as it’s simply nonsensical. You end up working 80% of the hours for 1/3 to 1/2 the pay and 20% of the respect. One often overlooked aspect of the partnership is the pension which may be one of the best benefits. Most partners receive something along the lines of 25-30% of the average of their three highest years of earnings – for life.

  • With this in mind, research which firms best aligns with your values in addition to the resources and training provided to advance your career progression.
  • Instead each is a professional network of firms that are owned and managed independently.
  • Until the late 20th century, the market for professional services was actually dominated by eight networks which were nicknamed the “Big Eight”.
  • Regardless of which company you choose, each Big 4 firm offers a unique work environment and career opportunities that can lay the foundation for a successful career in management consulting.

I have never in my life heard or read about someone who willingly chose the Big 4 route over Investment Banking, had they been fully aware of both. The same people who “settle” end up being those who can’t hack even the hour week busy seasons, and that’s why Big 4 has an ever greater churn rate than banking. CPAB’s preliminary 2023 assessments found that seven of the 53 files it has inspected to date at the four largest firms, or 13 per cent, had significant findings.

Each firm also assists with mergers, acquisitions, corporate restructurings, and forensic accounting. The Big Four all offer audit, assurance, taxation, management consulting, valuation, market research, actuarial, corporate finance, and legal services to their clients. A significant majority of the audits of public companies, as well as many audits of private companies, are conducted by these four networks. KPMG is a global network of accounting firms providing audit, tax, advisory, special interest and industry-specific services. It employs approximately 236,000 professionals working together to provide quality service in 145 countries around the world.

This is a slightly higher level of findings for these firms than the prior year, CPAB says, when eight of 67 inspections yielded significant findings. Or thinking about hiring additional accounting professionals to join your team? Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling. Since their compensation packages are similar, another factor one should consider when applying would be the fit factor. A quick scan of each of the firms’ pages shows they have different values and visions. To conclude, working in the Big 4 eventually pays exceptionally well, and, as discussed above, entry-level salaries vary marginally for sector, city, and region.

In 2002, “Big Eight” firm Arthur Andersen was discovered to have shredded documentation in an effort to hide Enron’s falsified financial numbers. Though one of the largest and most reputable firms at the time, it ultimately collapsed due to the scandal. In fiscal year 2021, KPMG reported the equivalent of $32.13 billion of revenue in U.S. dollars with strong growth across multiple divisions.

Klynveld Peat Marwick Goerdeler (KPMG)

The two decided to merge in 1998 and dedicated themselves to provide services of value while establishing and maintaining good customer relations. They are hoping to reach out to broader spectrum of people who are looking to work in the industry. Because the company has 4 subsidiaries, they offer a wide range of employment opportunities.


Moreover, in terms of salary, consultants are generally paid the most, followed by advisory, tax, and then audit/assurance. However, it is worth mentioning that salary differences can often be marginal depending on the experience and value of a particular employee. For entry-level positions, EY and PwC pay roughly the same and about 10% more than Deloitte and KPMG. Fourth in line, EY has positioned itself as a leader in business ethics and sustainability. EY also employs well over 200,000 people, but has a significantly lower revenue at just over $28 billion. This revenue comes from a balanced variety of services rather than any one particular focus.

Training Offered by KPMG

They have a viral Discovery Intern program that targets undergraduate first- and second-year students to integrate them into the Deloitte community. All of the firms are ranked in the top graduate employer lists consistently year on year and are deemed to be great places to work. The Big 4 are regarded as one of the most reputable graduate employers and have been the training ground for many business leaders. In July 1998, Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers, further reducing number of market leaders to five.

Who Are the Big Four Accounting Firms?

In fact, the vast majority of Fortune 500 companies have their financial statements audited by one of the Big Four. The “Big Four” is the nickname for the four largest accounting firms in the United States, as measured by revenue. They are Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG). This creates the complication that smaller firms have no way to compete well enough to make it into the top end of the market.

Find the Right School for You

They are Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG), read more about each below. It’s important to understand how owning a part of the firm can change the partner compensation. Rather than a strict and absolute salary, partners get a share of the profits that the firm generates throughout the year.

Big Four firms are also busy during periods relating to companies’ quarterly reporting. The PwC tax scandal is one example where PwC sold advice to clients on tax avoidance, and did so using information derived from the company’s government consulting arm. The Big Four firm was ordered to pay £5.3 million in costs to the regulator and two of its former partners were fined £350,000 and £70,000 respectively. The fine, which is the largest ever imposed on an audit firm by the Financial Reporting Council, was reduced from £30 million to reflect KPMG’s co-operation with the five-and-a-half year investigation.