If you’re a CPA (or aiming to become a CPA) you’ve probably heard the phrase “The Big Four”. The Big Four refers to the four largest professional services firms to provide audits to public and private companies internationally.
In addition to auditing, the Big Four also provide transaction and risk advisory, taxation, consulting, and actuarial services. These firms are the largest on a global scale, with a combined revenue exceeding 157 billion U.S dollars in 2020.
Until 1989, the Big Four were actually ‘the Big Eight’. The late eighties and early nineties brought various phases of industry consolidation, merging the eight firms to create the four we have today. So, what are these accounting firms? The Big Four include: Deloitte, PricewaterhouseCoopers (PwC), Klynveld Peat Marwick Goerdeler (KPMG), and Ernst & Young.
Deloitte Touche Tohmatsu Limited, aka ‘Deloitte’, is an international professional services firm with headquarters in New York City and offices in more than 100 locations across the globe. Deloitte has been the ‘biggest’ of the Big Four for a number of years running, with a total revenue of approximately 47.6 billion U.S dollars.
PricewaterhouseCoopers was created in 1998 through a merger between Price Waterhouse and Coopers & Lybrand. In 2010, the company’s name was shortened to PwC as part of a rebranding effort. The headquarters are in London. PwC ranks just behind Deloitte in terms of revenue and size.
Klynveld Peat Marwick Goerdeler (KPMG) was formed in 1987, from a merger between Klynveld Main Goerdeler (KMG) and Peat Marwick. KPMG currently employs about 190,000 individuals and has headquarters in Amsterdam.
Ernst & Young (EY)
Ernst & Young, aka EY, is another one of the Big Four that has its headquarters in London. The company was formed in 1989 from a merger between Ernst & Whinney and Arthur Young & Co. EY is known for being the auditor of many tech firms in the Silicon Valley.
Working for one of the Big Four
According to Statistica, the Big Four have a combined global workforce of more than one million employees. Working for one of the Big Four is an attractive prospect for young accountants, and there are several entry level options in a variety of departments (tax, audit, and advisory).
In general, a first-year audit or tax associate will earn a salary of between $40,000 to $60,000 per year. The specifics will depend on the department, city, country, and office.
The likelihood of being employed by one of these firms is much higher if you are a CPA. This is because the qualification tells future employers that you have had an extensive and well-rounded education. In addition to the CPA qualification, many of the Big Four look for candidates with the skills and experience in functioning accounting software. After all, big accounting firms know that technology is the way of the future. If you want to work for one of the Big Four, you will also need to demonstrate advanced financial analysis. All of these skills can be honed through the courses offered by CpaCredits.