Economical sciences/3. Finance
Moldovan V.V.
National University of Food
Technologies, Kiev, Ukraine
Big Four in
Financial Services Industry
The Big Four (also written Big
4) public accounting firms (audit firms) dominate the sector and are major
developers of talent within the financial services industry. Despite their
size, they are organized as partnerships rather than as corporations. These
firms provide an extensive range of accounting and auditing services including
external audit, taxation services, management and business consultancy, and
risk assessment and control. They also provide massive employment and career
development opportunities to accountants and auditors around the world. None of
the Big Four accounting firms is an individual firm. They are all accounting
networks, each one being a network of firms, held and managed independently and
have entered into agreements with other firms existing in the network to share
a common name, brand, and quality standards. Each network has set up an entity
aimed at co-ordination of activities of the network. In one case (KPMG), Swiss
is the co-coordinating entity, while in the remaining three (Deloitte Touche
Tohmatsu, PwC and Ernst & Young), UK is the coordinating entity. These
entities are not themselves involved in accountancy practice. Moreover, they
also do not own or control the member firms. They are just like law firm
networks instituted in the legal profession.The following are the members of
this internationally renowned group.
1. Deloitte Touche Tohmatsu
Limited (DTTL)
Branded as Deloitte, DTTL is
probably the biggest professional service organization in the world. The firm
was founded by William Deloitte in 1845. It went through a series of mergers
and reorganizations but kept its brand name along with its quality standards
and company values. Now, it emerges as one of the most successful brands in the
world.
2. PricewaterhouseCoopers
(PwC)
PwC is one of the world's
largest providers of accounting services. It employs 170,000 professionals in
154 countries around the world. The company was formed by the merger of two
large accounting firms - Price Waterhouse, and Coopers & Lybrand. The two
decided to merge in 1998 and dedicated themselves to provide services of value
while establishing and maintaining good customer relations. PwC firms operate
locally in different countries around the world. These independently owned and
managed firms, like other international companies, share common values and
standards. PwC provides excellent assurance, consulting, and tax services.
3. Ernst & Young (E&Y)
Ernst & Whinney merged
with Arthur Young to create Ernst & Young in 1989. Ernst & Young is a
global organization of member firms in more than 140 countries. It employs
people equipped with professional skills and values of integrity, respect,
teamwork, enthusiasm, and motivation. These form the core values of Ernst &
Young.
4. Klynveld Peat Marwick
Goerdeler (KPMG)
KPMG is a global network of
accounting firms providing audit, tax, advisory, special interest and industry-specific
services. It employs approximately 140,000 professionals working together to
provide quality service in over 140 countries around the world.
The organization was formed in
1987 through the merger of Peat Marwick International and Klynveld Main
Goerdeler. Like other professional service organizations, KMPG places great
value on its people and quality of service.
Accounting Today reports that
the Big Four accounting firms, all of which have Louisville offices, showed
solid revenue growth in 2012.
The Accounting Today article
cites an analysis from the social networking forum Big4.com that shows that
Deloitte LLP, Ernst & Young, KPMG LLP and PricewaterhouseCoopers had
revenue growth of between 1.4 percent and 7.8 percent in 2012.
PwC was the revenue leader in
2012, with revenue of $31.5 billion, an increase of 7.8 percent from 2011.
Deloitte was next with $28.2 billion, an 8.4 percent increase.
Ernst & Young placed third
with $24.4 billion in revenue in 2012, an increase of 6.7 percent. KPMG had
revenue of $23 billion, an increase of 1.4 percent.
Of the Big Four firms, Ernst
& Young had the most local certified public accountants as of November,
according to the list published in Business First on November, 9. The firm had
54 local CPAs, an increase of 17 percent from 2011.
According to the list, PwC had
40 local CPAs, an increase of 18 percent. KPMG had 23 local CPAs, a decrease of
8 percent from 2011. Deloitte had 20 CPAs, a decrease of 20 percent.
REFERENCES:
1. Kolakowski M. Big Four
Public Accounting Firms // [Electronic resource]. Access mode: http://financecareers.about.com/od/publicaccountingfirms/a/BigFour.html
2. Eigelbach K. Big Four
accounting firms had strong revenue growth in 2012 // Bizjournals [Electronic
resource]. Access mode: http://www.bizjournals.com/louisville/news/2013/01/11/big-four-accounting-firms-had-strong.html