About Big Four Audit Firms

Big Four (audit firms) 

The Big Four are the four largest international professional services networks in accountancy and professional services, 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, creating an oligopoly in auditing large companies.The Big Four firms are shown below, with their latest publicly available data.

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 demise of Arthur Andersen in 2002, following its involvement in the Enron scandal.

Firm	Revenues	Employees	Fiscal Year	Headquarters
PwC	$31.5bn	180,000	2012	United Kingdom
Deloitte	$31.3bn	193,000	2012	United States
Ernst & Young	$24.4bn	167,000	2012	United Kingdom
KPMG	$23bn	152,000	2012	Netherlands

None of the Big Four accounting firms is a single firm - rather, they are accounting 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 practice accountancy, and do not own or control the member firms. They are similar to law firm networks found in the legal profession.

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

The firms were called the Big 8 for most of the 20th century, reflecting the international dominance of the eight largest accountancy firms (presented here in alphabetical order):

Arthur Andersen (Until its destruction in 2002 for its part in the Enron scandal.)

Arthur Young & Co.

Coopers & Lybrand (until 1973 Cooper Brothers in the UK and Lybrand, Ross Bros., & Montgomery in the US)

Ernst & Whinney (until 1979 Ernst & Ernst in the US and Whinney Murray in the UK)

Deloitte Haskins & Sells (until 1978 Haskins & Sells in the US and Deloitte & Co. in the UK)

Peat Marwick Mitchell (later Peat Marwick, then KPMG)

Price Waterhouse

Touche Ross

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.


Competition among these public accountancy firms intensified and the Big 8 became the Big 6 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.


The Big 6 became the Big 5 in July 1998 when Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers.


The audit in the 2001 Enron scandal audited by Arthur Andersen leads to end for Arthur Andersen. And big 6 collapse, 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.