Who are the Big 4 Accounting Firms?

The big four accounting firms represented by their names in colorful square panels: KPMG, PwC, EY, Deloitte

The big 4 accounting firms are the four leading firms in the broadly defined field of accounting services. Amongst them, they share the largest network of clients worldwide. To get an idea of their scope, in the US the Big 4 audit about 80% of all public companies. Moreover, they are the biggest in the industry, measured in terms of gross revenue.

KPMG, EY, PwC, and Deloitte specialize mostly in financial accounting and auditing services. However, over the years, as the accounting profession has grown, so has the Big Four’s sphere of operations. Now, they offer a wide range of financial services in management consulting, corporate finance advisory, tax, data assurance, digital transformation, and Fintech.

Table of contents:

  1. Who are the Big 4?
  2. Local Regulations and Global CPA Firms
  3. Career Opportunities at the 4 Leading Accounting Firms
  4. Reputation and Controversies
  5. What’s Next?

Who Are the Big 4?

How the Big 8 Became the Big 4

The big 4 accounting firms actually started out as the Big 8. Industry mergers led to consolidation amongst them, and the figure settled on the Big 5. These were: PwC, KPMG, EY, Deloitte, and Arthur Anderson. However, this number was reduced even further after the collapse of Arthur Anderson following the Enron and WorldCom scandals. These scandals shook the accounting world to its core. And they were followed by many others.

KPMG

With offices in all major financial centers of the world, KPMG has an established presence in over 145 countries. Employing more than 236,000 people globally (as of FY21), KPMG is the smallest of the big 4 accounting firms globally by revenue ($32.1 Billion).

EY

Ranking third by global revenue (FY21: $40 Billion), EY is present in over 150 countries. With over 300,000 employees, EY is a strong contender for the top slot.

PwC

The second largest of the Big 4 (FY21: $45.1 Billion) is PwC. The PwC network spans 271,000 employees in 155 countries.

Deloitte

The largest of the Big 4, Deloitte, earned over $50 Billion in revenue in FY21. Deloitte operates in 150 countries and employs 334, 800 professionals.

Local Regulations and Global CPA Firms

Because of the scale and complexity of their operations, the big 4 accounting firms have to follow strict regulations when providing financial accounting services either at home or overseas. Thus, depending on the location, the Big 4 observe different requirements from relevant governing bodies.

For example, the Institute of Chartered Accountants of Pakistan (ICAP) regulates the CA (Chartered Accountancy) qualification in Pakistan. Therefore, all CPA firms in Pakistan are contractually obliged to recruit and train accountants with ICAP. Similarly, the Institute of Chartered Accountants of England and Wales (ICAEW) is the governing body in the UK. Hence, accounting firms in the UK have an obligation to hire employees who have obtained qualifications from ICAEW.

Furthermore, different parts of the world follow different conceptual accounting frameworks to which the Big 4 have to adhere. The USA follows guidelines issued by The Financial Accounting Services Board (FASB) known as US GAAP (Generally Accepted Accounting Principles). While the UK follows the guidelines of the International Accounting Services Board (IASB). These are the IFRS (International Financial Reporting Standards) and IAS (International Accounting Standards).

Career Opportunities at the 4 Leading Accounting Firms

As the accounting world has progressed, so have the recruitment procedures at the Big 4. Interestingly enough, you don’t have to be an accountant to land a job with them! You could start as a trainee in one of their non-accounting departments or even join as an experienced professional from another field. The Big 4 value talent at its core. For example, if you have experience as a digital transformation consultant, you can become a part of their data advisory team. Similarly, if you have commercial banking experience, you can find a place in the consultancy branch. Moreover, if you wish to work in auditing, payroll, tax, or accounting, but don’t have the necessary credentials yet, these companies will facilitate you in your journey towards obtaining a professional accounting qualification.

Career Ladder

If you have just finished your undergraduate degree (in any subject!), you can apply for their trainee programs across a range of departments. You can expect your career map to look something like this:

The standard career ladder at the big four accounting firms represented with blue and green concentric circles

Figure 2: Career Map in the Big Four

Partner is the highest level in the Big 4 career ladder. It takes an accountant between ten to fifteen years to become a partner at one of the big 4 accounting firms.

Reputation and Controversies

A Legacy of Trust

Over the years, countless accounting firms have tried to dethrone the big four. However, they have invariably failed. This is primarily due to the legacy of the global CPA firms and the trust embedded within them by millions of customers worldwide. Nonetheless, the have weathered their fair share of scandals in recent years.

Scandals in The Recent Past

The recent fall of WireCard in 2020 has brought the role of the big four accounting firms under scrutiny once again. Most critics wonder “who audits the audit firms” because they seem to be unable to prevent company failures. Similarly, in 2017, KPMG was accused of being part of the collapse of Halifax Bank of Scotland (HBOS). Later, however, HBOS was bought by Llyods and KPMG was cleared of all charges.

In such cases, the big 4 accounting firms invariably stick to a common defense: an auditor’s report is simply an opinion. This is how the auditors absolve themselves of the responsibility of fraud. They claim it is up to the forensic advisory team to gauge whether or not a company is involved in deceiving investors.

Other Criticisms

On another note, the Big 4 have also faced criticism over unhealthy working hours, underpayment of trainees, and lack of empathy towards employees. However, with changing times, these firms have changed too. A 2019 UK job satisfaction survey saw three of the big four accounting firms rank among the top 20 companies to work for. The results of this survey suggest that auditors and accountants enjoy some of the highest levels of job satisfaction in the corporate world.

Moreover, to keep up with the post pandemic world, PwC has offered all its employees the choice to work from home indefinitely. This suggests that the big 4 accounting firms value employees as human beings first.

What’s Next?

If you are set on a career at one of the global CPA firms, your practical skills will be what keeps your resume from falling into the rejection pile. By learning the ropes of the most in-demand accounting and auditing tools out there, you will be ready to outshine all the competition, regardless of your background. Sign onto our Complete Financial Analyst Course for more practical insights into the fast-paced world of the Big 4 Accounting Firms you can leverage towards landing your first job!

Ready to take the next step towards a career in Finance? 

From foundational topics in Accounting and Financial Analysis, through Corporate Finance and M&A, to specialized Fintech and Economics courses, the 365 Financial Analyst curriculum is designed to prepare you for the world of Finance as it is today. Whether you are a total beginner or a working professional, our expert-led courses offer the opportunity to upskill at your own pace. Find the right fit for you and start learning today!  

Financial Auditing: Ultimate Guide

Financial auditing entails producing an opinion on the truth and fairness of the financial statements of a company. Only

Financial Auditing: Ultimate Guide

Financial auditing entails producing an opinion on the truth and fairness of the financial statements of a company. Only licensed accounting professionals (auditors) authorized by the relevant governing bodies for the territories they operate in can carry out the auditing of financial statements. Audits were first regulated with the...
Learn More

Clearinghouses and Custodians: Financial Intermediaries 101

Intermediaries are vital for a well-functioning financial system and allow their clients to solve the problems they face more

Clearinghouses and Custodians: Financial Intermediaries 101

Intermediaries are vital for a well-functioning financial system and allow their clients to solve the problems they face more efficiently than they could by themselves. We find several types: Brokers, Exchanges, and Alternative trading systems Dealers and Securitizers Depository Institutions Insurance Companies Arbitrageurs, and Clearinghouses and Custodians We shall...
Learn More

Long and Short Positions: Guide to Wall Street Lingo

Rather than an instance of duration, long and short positions are a reference to haves and have-nots. They touch

Long and Short Positions: Guide to Wall Street Lingo

Rather than an instance of duration, long and short positions are a reference to haves and have-nots. They touch on securities an investor really owns versus securities an investor owes. Basically, the terms “short” and “long” denote what “selling” and “buying” do respectively. Featured: What is a Long Position?...
Learn More