The majority of the world’s auditing services are performed by only four accounting firms.
Known as the ‘Big 4’, these firms completely dominate the industry, auditing more than 80 percent of all US public companies. In addition, these mammoth organizations advise on tax and offer a wide range of management and assurance services.
Who Are The Big 4?
Although usually identified as single companies, each one of the Big 4 Accounting Firms is actually a network of independent corporations who have entered into agreements with one another to set quality standards and share a common name.
1. Deloitte LLP
30 Rockefeller Plaza
New York, NY 10112
Phone: (212) 489-1600
Fax: (212) 489-1687
Deloitte LLP is the number one firm in the United States. The company began as the separate companies of William Deloitte, Charles Haskins, Elijah Sells, and George Touche. The three companies eventually merged to become Deloitte & Touche. Today the company is known primarily as Deloitte LLP, and has four subsidiaries: Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP and Deloitte Tax LLP.
Over time the company has merged with other companies or bought them out completely and created subsidiaries to become one of the biggest firms in the world. The company is one consistently voted as one of the best employers to work for by Fortune Magazine. They hire many of their entry-level employees through universities where they have programs.
In 2012 the company built Deloitte University to train its current and future employees. They also offer internships and training seminars at the University.
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. A prospective employee can work in categories such as consulting, financial advisory services, taxes, growth enterprise, and many more.
Deloitte has several recruiting teams that visit college campuses across the country, hoping to recruit those who have taken classes involved in their partnership program. Some of the universities that have these programs are Columbia Business School and Duke University.
However, there are more than 20 schools that offer Deloitte accounting curriculum. Deloitte and its subsidiaries have more than 600 offices in more than 150 countries. Including offices in just about every US state, from California to Florida.
300 Madison Avenue
New York, NY 10017
Phone: (646) 471-4000
Fax: (646) 471-4444
PWC (PricewaterhouseCoopers) is ranked as the number two accounting firm in the United States. The company founded by Samuel Lowell Price began in London 1849.
The company grew over the years, merging with Holyland and Waterhouse, then a final merger game in 1998 when Price Waterhouse and Coopers & Lybrand came together to create PricewaterhouseCoopers. The firm went on to shorten its brand name to PwC in 2010, however PricewaterhouseCoopers remains as the full legal name of the organization and is the name that is used by PwC firms to sign company audits.
PwC Training Opportunities
Like Deloitte, PwC has seminars and training programs for its current and prospective employees. The difference is that their program is online, free, and available to the public. Those who are looking to earn CPE credits (Continuing Professional Education) can do so on the PwC Open University website.
Learn From Home
In this respect, PwC might have a leg up on their competition because people can access the material right from their home and it doesn’t cost them anything. The company also has campus events at colleges such as Virginia Tech throughout the year.
PwC offers a plethora of services to their clients including Audit & Assurance, consulting, IFRS reporting, tax services, and others. This is great for current and potential employees of the company because it gives a wide range of areas they can specialize in. Working for PwC means that you will work in one of the most diverse environments, they are ranked number two in Diversity Inc. magazine out of 50 companies.
3. Ernst & Young
5 Times Square
New York, NY 10036-6530
Phone: (212) 773-3000
Fax: (212) 773-6350
Ernst & Young is rated number three out of the top 100 accounting firms in the United States. The firm was formed by the merger of two companies, Arthur Young & company and Ernst & Ernst. Interestingly enough Arthur Young and Alwen Ernst never met in life.
Their companies merged in 1989 to form Ernst & Young, long after the two had passed away. Both men opened their original firms with their brothers, and passed away within days of each other.
Today this big 4 firm stands tall and is located in more than 150 countries with more than 700 offices. They offer a plethora of services such as assurance, taxes, advisement, transactions, and many more. Offering such a wide range of services allows the company to cater to a very diverse group of employees.
EY Recognized for Diversity
Ernst & Young are rated number four in DiversityInc Magazine’s top 50 places to work for diversity. Having so many areas of interest, anyone in the accounting trade is sure to find a position that suites their specialization. Ernst & Young offers training programs online and on the job, however the materials and class resources are not available to the public.
This could be detrimental to the company in the future as PwC offers all of their materials and even classes online for free and to the general public.
Like Deloitte & PwC, Ernst & Young does hold college recruiting events across the country every year where they hire in entry-level associates.
345 Park Avenue
New York, NY 10154-0102
Phone: (212) 758-9700
Fax: (212) 758-9819
KPMG is the number four firm of the big four 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.
In 1987 the firm merged with KMG to form what is now known as KPMG. The firm changed their name a few times over the years but ultimately decided to stick with KPMG.
The firm has been consistently voted as one of the best places to work by DiversityInc Magazine and currently holds the number 23 spot on the list. Which means it hosts a very culturally diverse work environment and works with companies that are not yet as successful by hiring them for services and goods.
KPMG offers three main services. These include audits, advisory services, and taxes. However, these three services can be broken down in many sub-services making KPMG a full-service firm.
Training Offered by KPMG
KPMG has a website that offers free webcasts, self-education, and other resources for those who wish to learn online. Utilizing these tools allows college students and current professionals to earn CPE’s. In addition, to online tools, the firm also offers in person classes, seminars, and symposiums that may also offer CPE’s.
Like the other big three big 4 accounting firms, KPMG does much of its recruiting on college campuses, seeking out the best and brightest to add to their big 4 firm.
The History of The Big 4 Accounting Firms
Even the smallest of the Big 4 is several times the size of the 5th largest firm and industry experts believe it is unlikely that any existing corporation will ever be able to match the size of the major players.
This is partly due to the fact that, until the late 1980s the major accounting firms were known as the Big 8 and included the likes of Coopers & Lybrand, Ernst & Whinney, Deloitte Haskins & Sells, Arthur Andersen, Price Waterhouse and Touche Ross.
In July 1998, Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers, further reducing number of market leaders to five.
The Financial Collapse
The last major change to the fortunes of the global accounting firms followed the collapse of the Enron corporation which was audited by Arthur Anderson.
In the aftermath of the collapse, the accounts company was found guilty of criminal charges relating to its business practices. Although the conviction was eventually overturned, the damage to its reputation meant Arthur Andersen was unable to recover and eventually sold most of its business to members of what would come to be known as the Big 4.
Big companies see it as a mark of prestige to have their audits carried by a member of the Big 4, even though the cost of such a service may be significantly higher than what would be charged by a smaller firm carrying out exactly the same work.
This same notion of prestige also applies to all those working for the Big 4. New graduates looking for careers in the financial services industry face fierce competition for the places that are made available each year, knowing that spending time with one of the Big 4 is the equivalent of obtaining a degree from an Ivy League university and will put them on the fast track to success.