How much you know about Big Four (audit firms)

The Big Four are the four largest international professional services networks in accountancy and professional services, which 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:

Firm	Revenues	Employees	Fiscal Year	Head Quarters
PWC (officially Price waterhouse Coopers	$29.2b	169,000	2011	United Kingdom
KPMG	$22.7bn	145,000	2012	Netherlands
Ernst & Young	$22.9bn	152,000	2011	United Kingdom
Deloitte Touche Tohmatsu	$28.8bn	182,000	2011	United States

Edwin Waterhouse (Founder of PWC)

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sir william barclay peat (Founder of KPMG)

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Founder of Ernst & Young

Ernst & Young is the result of a series of mergers of ancestor organizations. The oldest originating partnership was founded in 1849 in England as Harding & Pullein.^[6] In that year the firm was joined by Frederick Whinney. He was made a partner in 1859 and with his sons in the business it was renamed Whinney Smith & Whinney in 1894^.

In 1903, the firm of Ernst & Ernst was established in Cleveland by Alwin C. Ernst and his brother Theodore and in 1906 Arthur Young & Co. was set up by the Scotsman Arthur Young in Chicago.

William Welch Deloitte (Founder of Deloitte)

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Mergers and the Big Auditors (How Big 8 Converts Big 4)

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

Big 8

The firms were called the Big 8 for most of the 20th century, reflecting the international dominance of the eight largest accountancy firms:

Most of the Big 8 originated in alliances formed between British and US accountancy firms in the 19th or early 20th centuries. Price Waterhouse was a UK firm which opened a US office in 1890 and subsequently established a separate US partnership. The UK and US Peat Marwick Mitchell firms adopted a common name in 1925. Other firms used separate names for domestic business, and did not adopt common names until much later: Touche Ross in 1960, Arthur Young (at first Arthur Young, McLelland Moores) in 1968, Coopers & Lybrand in 1973, Deloitte Haskins & Sells in 1978 and Ernst & Whinney in 1979.

The firms’ initial international expansion was driven by the needs of British and US based multinationals for worldwide service. They expanded by forming local partnerships or by forming alliances with local firms.

Arthur Andersen had a different history. The firm originated in the United States, and expanded internationally by establishing its own offices in other markets, including the United Kingdom.

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 KMG Group to become KPMG Peat Marwick, later known simply as KPMG.

Big 6

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.

Confusingly, in the United Kingdom the local firm of Deloitte, Haskins & Sells merged instead with Coopers & Lybrand. For some years after the merger, the merged firm was called Coopers & Lybrand Deloitte and the local firm of Touche Ross kept its original name. In the mid 1990s however, both UK firms changed their names to match those of their respective international organizations. On the other hand, in Australia the local firm of Touche Ross merged instead with KPMG.It is for these reasons that the Deloitte & Touche international organization was known as DRT International (later DTT International), to avoid use of names which would have been ambiguous (as well as contested) in certain markets.

Big 5

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

Big 4

The Enron collapse and ensuing investigation prompted scrutiny of their financial reporting, which was audited by Arthur Andersen, which eventually was indicted for obstruction of justice for shredding documents related to the audit in the 2001 Enron scandal. The resulting conviction, since overturned, still effectively meant the end for Arthur Andersen. Most of its country practices around the world have been sold to members of what is now the Big Four, notably Ernst & Young globally, Deloitte & Touchein the UK, Canada, Spain and Brazil, and PricewaterhouseCoopers(now known as PwC) in China and Hong Kong.

The Big 4 are sometimes referred to as the “Final Four”^{[citation needed]} due to the widely held perception that competition regulators are unlikely to allow further concentration of the accounting industry and that other firms will never be able to compete with the Big 4 for top-end work, as there is a market perception that they are not credible as auditors or advisors to the largest corporations.

2002 saw the passage of the Sarbanes–Oxley Act into law, providing strict compliance rules to both businesses and their auditors.

In 2010 Deloitte with its 1.8% growth was able to beat PricewaterhouseCoopers with its 1.5% growth to gain first place and become the largest accounting firm in the industry. In 2011, PwC re-gained the first place with 10% revenue growth.

Global member firms

Country	Deloitte Touche Tohmatsu	PwC	Ernst & Young	KPMG
Argentina	Deloitte & Co. S.R.L	Pricewaterhouse & Co. S.R.L.	Ernst & Young	Sibille
Bangladesh	Hoda Vasi Chowdhury & Co.	A. Qasem & Co. (AQC)	S. F. Ahmed & Co.	Rahman Rahman Huq
Brazil	Deloitte	PwC	Ernst & Young Terco	KPMG
China	Deloitte Hua Yong	PricewaterhouseCoopers Zhong Tian	Ernst & Young Hua Ming	KPMG Hua Zhen
Egypt	Kamel Saleh	Mansour & Co.	Allied for Accounting and Auditing (Emad Ragheb)	Hazem Hassan
El Salvador	DTT El Salvador, S.A. de C.V.	PricewaterhouseCoopers El Salvador	Ernst & Young El Salvador, S.A. de C.V.	Aguirre Garcia & Cia. S.A.
India	Deloitte Haskins & Sells, A.F Ferguson, P C Hansotia, C C Chokshi & Co, S.B. Billimoria, M.Pal & Co., Fraser & Ross and Touche Ross & co	Price Waterhouse, Price Waterhouse & Co., Lovelock & Lewes and Dalal & Shah	S.R.Batliboi & Co., S.R.Batliboi & Associates, S.V.Ghatalia & Associates	BSR & Co
Indonesia	KAP Osman Bing Satrio	KAP Tanudiredja, Wibisana & Rekan	KAP Purwantono, Suherman & Surja	KAP Sidharta dan Widjaja
Israel	Deloitte Brightman Almagor Zohar	Kesselman & Kesselman, PwC Israel	Kost, Forer, Gabbay & Kasierer (Ernst & Young Israel)	KPMG Somekh Chaikin
Japan	Deloitte Touche Tohmatsu Kansa Houjin Tohmatsu	PricewaterhouseCoopers Aarata Aarata Kansa Houjin	Ernst & Young ShinNihon LLC ShinNihon Yugen-sekinin Kansa Houjin	KPMG AZSA LLC (formerly KPMG AZSA & Co.) Azsa Kansa Houjin
Jordan	Deloitte Touche(M.E)	PwC	Ernst & Young	KPMG
Lebanon	Deloitte Touche(M.E)	PwC	Ernst & Young
Malaysia	Deloitte KassimChan	PricewaterhouseCoopers	Ernst & Young	KPMG
Mexico	Galaz, Yamazaki, Ruiz Urquiza, S.C.	PricewaterhouseCoopers México	Mancera S.C.	KPMG Cárdenas Dosal, S.C.
Morocco	Deloitte Touche(M.E)	PwC	Ernst & Young	KPMG
Nigeria	Akintola Williams Deloitte	PwC Nigeria	Ernst & Young	KPMG
Pakistan	M. Yousuf Adil Saleem & Co.	A. F. Ferguson & Co.	Ernst & Young Ford Rhodes Sidat Hyder	KPMG Taseer Hadi & Co.
Philippines	Manabat Delgado Amper & Co.	Isla Lipana & Co.	Sycip Gorres Velayo & Co.	Manabat Sanagustin & Co.
Saudi Arabia	Deloitte & Touche Bakr Abulkhair & Co	PricewaterhouseCoopers LLP	Ernst & Young Saudi Arabia	KPMG Al Fozan & Al Sadhan
South Africa	Deloitte Touche Tohmatsu	PWC	Ernst & Young	KPMG
South Korea	Anjin LLC	Samil LLC	Hanyoung LLC	Samjong LLC
Sri Lanka		PwC	Ernst & Young	KPMG
Sweden	Deloitte Touche Tohmatsu	Öhrlings PricewaterhouseCoopers		KPMG
Syria	Deloitte(M.E)- Nassir Tamimi Chartered Accountant	Pricewaterhousecoopers	Abdul Kader Hussarieh and partners	Mejanni & Co. Charted Accountants and Consultants LLC
Taiwan	Deloitte.	PricewaterhouseCoopers Taiwan	Ernst & Young	KPMG
Turkey	DRT Bagimsiz Denetim ve S.M.M. A.S.	Basaran Nas Bagimsiz Denetim ve SMMM A.S.	Güney Bagimsiz Denetim ve S.M.M. A.S.	Akis Bagimsiz Denetim ve S.M.M. A.S.
Uzbekistan.	Deloitte Touche Tohmatsu	ASC PricewaterhouseCoopers	Evan Young