What Are the Big 4 Accounting Firms? Definition and Critique

Big Four

Investopedia / Nez Riaz

What Are the Big Four?

The "Big Four" is the nickname used to refer to the four largest accounting firms in the United States, as measured by revenue. They are Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG). Aside from auditing services, the Big Four offer tax, strategy and management consulting, valuation, market research, assurance, and legal advisory services.

Recently, they started to offer digital transformation consulting to serve the needs of the digital age. They are the leading source of tax law interpretation and experts on changes in accounting and auditing standards.

Key Takeaways

  • The "Big Four" refers to the four largest accounting firms in the United States.
  • The largest accounting firms used to comprise the "Big Eight" firms, but mergers and closures have reduced the top tier of companies.
  • These four firms audit the financial statements for the vast majority of companies in the S&P 500.
  • In addition to their auditing services, the Big Four also provides consulting, valuation, market research, assurance, and legal advisory services.
  • Securing a job at a Big Four firm is considered highly competitive, and busy season is often more strenuous compared to other public accounting firms.

Understanding the Big Four

Through industry consolidation that began in 1989, what used to be the Big Eight has become the Big Four today. The eight, in alphabetical order, were Arthur Andersen, Arthur Young, Coopers & Lybrand, Deloitte Haskin & Sells, Ernst & Whinney, Peat Marwick Mitchell, Price Waterhouse, and Touche Ross—all U.S. or U.K. entities.

Arthur Young combined with Ernst & Whinney and Deloitte Haskin & Sells merged with Touche Ross to reduce the group count to six. Price Waterhouse and Coopers & Lybrand then merged their practices making it five. Following the collapse of Arthur Andersen, due to its proven responsibility in the Enron scandal, the five became the present-day four.

These firms perform most of the auditing work for some of the largest public companies in the world. In fact, the vast majority of Fortune 500 companies have their financial statements audited by one of the Big Four. Their clients include such powerhouses as Berkshire Hathaway, Ford Motor Co., Apple, Exxon Mobil, and Amazon. According to a 2018 report by the CFA Institute, 30% of the S&P 500 were audited by PwC, 31% by EY, 20% by Deloitte, and 19% by KPMG.

With 360-degree views of companies and industries, the Big Four are authorities in the business. They have extensive recruiting and training programs for fresh graduates and sought-after passageways for tax and consulting professionals to and from many industrial sectors.

Each firm is not a single firm but a composition of individual professional services networks. Each of these networks are owned and managed independently, having entered into agreement with other member firms to share the same name, brand, and standards.

Deloitte LLP

The largest of the Big Four, Deloitte's workforce grew to over 345,000 employees during their 2021 fiscal year. The company's annual revenue also exceeded $50 billion for the first time, growing 5.5% from prior-year revenue. Through fiscal year 2021, Deloitte employed more than 121,000 individuals within the United States. It had 126 offices across 97 cities. Despite overall company growth, Deloitte's 2021 United States revenue declined from 2020.


In 2021, PwC reported annual revenue of $45.1 billion, the second highest amount Big Four firms but only up 2% (in its local currency) from the year prior. Revenue in the United States remained flat, though PwC is currently investing $12 billion to add 100,000 new jobs over the next five years to strengthen its global presence. It is also making a $3 billion investment in quality-centric improvements including major advancements in audit technology. In 2021, PwC's workforce grew to 295,000 individuals.


During fiscal year 2021, Ernst & Young reported roughly $40 billion of company-wide revenue, an increase of 7.3% from the year prior. Ironically, EY has recorded 7.3% compound annual growth over the past seven years. EY recently announced a $10 billion investment in company expansion in an attempt to reach more clients and more successfully navigate their needs. At the end of fiscal year 2021, EY reported having 312,250 on staff.


KPMG employs over 219,000 individuals across the world, 35,000 of which reside within the United States. KPMG has an office in every state across the U.S. and most recently reported having over 650 offices in 147 countries. In fiscal year 2021, KPMG reported the equivalent of $32.13 billion of revenue in U.S. dollars with strong growth across multiple divisions.

Arthur Andersen and Enron

In 2002, "Big Eight" firm Arthur Andersen was discovered to have shredded documentation in an effort to hide Enron's falsified financial numbers. Though one of the largest and most reputable firms at the time, the firm ultimately collapsed due to the scandal.

Critics of the Big Four

However, the Big Four is not without its critics. Despite all its resources and inside access to companies, these giants have not been the ones to uncover massive frauds that have caused pain for shareholders of companies and investors in funds. Enron and Worldcom were exposed by forensic accounting experts, not any of the Big Four.

Critics say that the accounting firms do not want to ask too many tough questions of their paying clients or assiduously investigate something suspicious in their books. That would be tantamount to biting the hand that feeds you.

What Is the Biggest Big Four Company?

With $50.2 billion of revenue earned during its 2021 fiscal year, Deloitte is the largest of the Big Four firms.

What Services Do Big Four Companies Provide?

Each Big Four company will have a diverse staff armed with varying level of expertise to meet their client's needs. In general, Big Four firms all provide audit, assurance, consulting, financial advisory, risk management, and tax compliance services. Each firm also assists with mergers, acquisitions, corporate restructurings, and forensic accounting.

What Is Busy Season Like in a Big Four Company?

The busy season typically means long hours of auditing or tax compliance to meet reporting deadlines for clients. Big Four employees often work much heavier hours during busy season, sometimes doubling the capacity of what is worked during the non-busy season.

The busy season is often the start of the calendar year with many reports and returns due between January and April. Big Four firms are also business surrounding quarterly reporting.

The Bottom Line

The Big Four refers to the four largest accounting firms in the Unites States. While they employ a great deal of people, this firms also have their critics. Primarily, people criticize them for not asking the tough questions necessary for uncovering fraud.

Article Sources
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  2. U.S. Government. "Public Accounting Firms: Mandated Study on Consolidation and Competition (30-JUL-03, GAO-03-864)."

  3. Deloitte. "Deloitte Reports FY2021 Revenue."

  4. Deloitte. "2021 Facts & Figures."

  5. PwC. "PwC Announced Global Revenues of US $45 Billion."

  6. Ernst & Young. "EY Reports Global Revenues of $40 Billion in 2021 and Outlines Record $10 Billion Investment Plan Over Next Three Years."

  7. KPMG. "KPMG Fast Facts."

  8. KPMG. "KPMG Reports Global Revenues of $32.13 Billion for FY21, Focus On Strategy Enables 10% Growth."

  9. U.S. Government Printing Office. "Destruction of Enron-Related Documents by Andersen Personnel."

  10. U.S. Securities and Exchange Commission. "Report of Investigation by the Special Investigative Committee of the Board of Directors of Worldcom, Inc.," Pages 1-4, 274, and 279.

  11. Harvard Business Review. "Why Good Accountants Do Bad Audits."