Do you know what accounting firms are and why are they considered as a backbone of business? Accounting firms offer a myriad of services that help business owners stay financially organized, tax compliant and that help prepare for business growth.

Like the many services an accounting firm provides, there are many companies doing that. However there are 4 big accounting firms that you have to know about. In this article we will learn all about the big four accounting firms. From their journey to the top to all the services that can help you in your business. So let’s get started.

At some point, you’ve probably heard about the Big 4 accounting firms. Deloitte, PwC, Ernst & Young, and KPMG are titans in the business world and each boast revenues in the billions. These firms actually provide a huge range of services (including consulting) and are recruiting powerhouses.

Big 4 Account Firms History

The Big 4 originally actually started as a handful of smaller accounting firms. Through a flurry of consolidations through mergers and acquisitions throughout the 20th century, these firms eventually consolidated themselves into the Big 4.

During the 2000s, the Big 4 also expanded their consulting businesses through further acquisitions. Most notably, Deloitte acquired Monitor Group, PwC acquired Booz & Company, and Ernst & Young acquired Parthenon. As the firms have begun to count more on consulting resume, they acquired branded strategy houses to move into the most lucrative sector of consulting.

For some of these firms, consulting revenue has surprisingly eclipsed accounting as the main revenue generator. Overall, consulting is either the first or second largest revenue stream for each Big 4 company.

How the Big 4 Accounting Firms are Organized

Each of the Big 4 accounting firms operates under their unified respective brand. However, each firm is actually a network of independent corporations who have agreed to meet a professional standard and share a common name. With this structure, the subsidiaries in each firm are more agile in their decision making and maintain unique cultures.

Now that we know how the firms are organized, let’s take a look at what each firm does.

Why Work for the Big 4 Accounting Firms?

The Big 4 companies are renowned worldwide for their reputation and prestige. Each consistently rank among the best companies to work for in the world.

Future employers see Big 4 experience as a major stamp of approval that you have gone through a rigorous selection process and training. So even if accounting or consulting is not in your long-term future, working at the Big 4 can still be a great stepping stone towards your future endeavors. On the other hand, if you find you want to work at the Big 4 for life, there is ample opportunity for you to jump on the partner path at any of the firms.

Perhaps more importantly, you’ll start off your career surrounded by smart and driven colleagues. Building a network with Big 4 peers can help push you to achieve your personal and career goals both in the short and long term.

What They Do

The Big 4 firms mainly offer three types of services: audit, tax, and consulting. Audit and tax are considered to be two different types of accounting, while consulting focuses on helping businesses with a wide a range of business problems.

·       Big 4 Audit

Audit services primarily focus on determining the accuracy and validity of a company’s financial statements. As an auditor, you’ll be spending a lot of time examining internal records, speaking with clients, and preparing reports to summarize findings. You’ll also build a strong understanding of accounting concepts.

·       Big 4 Tax

Tax focuses on (you guessed it) tax matters and offer a much more specialized service than auditing. As a tax accountant, your job is to help your clients prepare, submit, and save money on taxes. You’ll spend a lot of time researching tax laws, procedures, and strategies to provide your client with the best advice.

·       Big 4 Consulting

Consulting involves helping businesses improve their strategies and operations in a wide range of methods. As a consultant, you spend time understanding a client’s specific problems, investigating and collecting data, and providing recommendations based on your analysis.

The Future of the Big 4

There will always be a need for the professional services the Big 4 provides. Though extremely large and vast in size, each firm continues to grow each year. Further consolidation through mergers and acquisitions will likely make the Big 4 even bigger as time goes on, especially as they continue to expand their services.