Want a Job? Here Are The Big Four Accounting Firms

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“The Big 4” is a term used collectively for the four largest professional services firms. These consist of Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers. These firms are compared not just on the basis of size, but also on the collection of revenue and their workforce. They are the dream workplaces for the job-aspirants from the arts and commerce background.

These firms offer audit, assurance, taxation, management consulting, corporate finance, legal services, etc. To their clients. these four occupy a significant majority in the audit market, combined public and private.

These history of these firms states that the market of professional services was actually dominated by eight networks which were then, nicknamed as “The Big 8”.

The Big 8 

It consisted of - 

1. Arthur Andersen

2. Coopers and Lybrand

3. Deloitte, Haskins, and Sells

4. Ernst and Whinney

5. Peat Marwick Mitchell

6. Price Waterhouse

7. Touche Ross

8. Arthur Young

In 1987, Peat Marwick merged with Klynveld Main Goerdeler firm to become KPMG Peat Marwick, later simply known as KPMG. Even though this merger was not a result of the mergers between The Big 8, still, it involved a firm belonging to the dominating firms.

Due to severe competition between the firms, The Big 8 became The Big 6 in 1989. This happened when Ernst and Whinney merged with Arthur Young to form Ernst & Young and similarly Deloitte, Haskins, and Sells merged with Touche Ross to form Deloitte & Touche in the same year.

The Big 6

The Big 6 after the mergers were - 

1. Arthur Andersen

2. Coopers and Lybrand

3. Deloitte & Touche

4. Ernst & Young

5. KPMG

6. Price Waterhouse

The Big Five

The Big Six became the Big Five, in July 1998, when Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers.
The Big Five at this point in time were:
1· Arthur Andersen
2· Deloitte & Touche
3· Ernst & Young
4· KPMG
5· PricewaterhouseCoopers

The Big Four

Finally, the insolvency of Arthur Andersen stemming from their involvement in 2001 Enron Scandal produced the Big Four:

1· Ernst & Young2· Deloitte & Touche
3· KPMG
4· PricewaterhouseCoopers

The Enron scandal resulted in the end of Arthur Andersen because the firm was not allowed to take on new clients while they were under investigation. Most of its country practices around the world were sold to members of what is now the Big Four.

Ernst & Whinney merged with Arthur Young to form Ernst & Young, and Deloitte, Haskins & Sells merged with Touche Ross to form Deloitte & Touche. Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers.

Ultimately, The Big Four have become the dream company for all the students from commerce, law, or any other background. The reason being that these firms acquire a monopoly in the market of providing professional services.

Not only are their services worthy of the name, but also the salaries and facilities they provide to their employees is something that is well enough to attract people from all around the globe.

Deloitte, EY, KPMG, and Pricewaterhouse handled the audits of 283 companies as per the Nifty 500 indexes for 2019-20 (according to a joint report by NSE and Prime Database Group). 

These firms select people through campus placements as well which is why students in their last year of graduation have their priority fixed towards these firms only.

Written by - Ritika Singh

Edited by – Bushra Makhdoomi