“BIG 4” AUDIT FIRMS
Deloitte
- World’s largest financial auditing services firm
- In UK, it has highest number of clients amongst FTSE 250 companies
- Ineum Consulting is a spin-off of Deloitte France's consulting division
- Deloitte acquired Monitor Group – a management consulting firm co-founded by Michael Porter
Deloitte is the world’s largest audit firm by revenue and by the number of professionals. After a series of mergers, Deloitte was renamed Deloitte Touche Tohmatsu in the 90’s. With an experience of over a century, Deloitte helps companies with services like tax, advisory, auditing and consulting. Deloitte has a network of member companies (a separate subsidiary for a particular regional location) operating under the group company, providing various financial services to clients.
Deloitte provides Enterprise Risk Management services and Consulting services encompassing various functionalities of a business like Strategy & Operations, Human Capital, Technology; along with few other specialized consulting services like enterprise sustainability, infrastructure transformation etc. Deloitte Growth Enterprise Services also include growth strategies, risk intelligence and organizational performance. The company has consistently ranked in Fortune magazine’s “100 Best Companies To Work For” list as it gives individuals (candidates) an option to choose from various career models that are based on geographic location & business needs.
It provides various opportunities like Analyst, Principal Analyst, Associates, Partners, Specialists & Specialist Leaders. The company is currently under a probe for allegedly helping Standard Chartered Bank cover up suspected money laundering operations.
Criticisms:
State of California Courts System: Deloitte failed to fully implement the case management system for courts in the state of California, USA and also exceeded the budget for the project which led to the termination of the project.
Australian Tobacco Industry: Deloitte’s report on illicit tobacco in Australia was found to be potentially misleading by the officials. A subsequent report by the company on counterfeit cigarettes was also termed as baseless and deceptive.
Canadian Bar Association: Deloitte was found guilty of unprofessional conduct and fined $40,000 after one of its professionals was found communicating about confidential information.
PricewaterhouseCoopers
- World’s second largest financial auditing services firm
- Fifth largest privately owned organization in the United States
- Audits 33% of companies in the FT Global 500
- Audits 29% of the companies in the Fortune Global 500
Formed by the merger of UK’s two biggest and well known accounting firms, PwC is the world’s largest professional services firms leading the Big Four auditing firms and provides high quality assurance, tax and advisory services to many private and public institutions. It serves over 400 companies in the Fortune 500 and has ranked in Fortune magazine’s Best 100 Companies to work for. It is the seventh largest privately held company in the United States and gets majority of its revenues from Assurance (48%) business, followed by Tax (26%) and Advisory (26%) services.
Europe is the largest market for the UK based firm from where it acquires about 42% revenues. The company makes 34% & 28% of its revenues from the US and Asia respectively. It has developed specialized services in Enterprise Risk Management (ERM) framework, assisting corporations with outsourcing and political risk assessment.
Notable Controversies:
Willie Nielsen Co dragged PwC to court Co for putting them into tax shelters that were later disallowed by the US government.
Satyam Computers: It was found that PwC carried an audit of the fallen IT Company, which was later found to be inaccurate and unreliable.
PwC has also been accused of inappropriate accounting practices followed during the audit of JP Morgan Securities, American International Group & Global Trust Bank.
Ernst & Young
- World’s third largest financial auditing services firm
- E&Y acquired operations of Arthur Anderson in many countries except in UK, China and the Netherlands
- EY earned 100% rating on the Human Rights Campaign Corporate Equality Index in 2013
- EY was named one of DiversityInc magazine's Top 50 companies for diversity in 2015
Ernst & Young is one of the better managed companies amongst the Big 4. Unlike others it does not follow the centrally managed professional services network and has divided its business according to four major geographical regions. It has a structure that is formed specifically to cater to diverse needs of various multinationals. In 2000, E&Y sold off its Consultancy business to CapGemini. E&Y provides services to leading companies in major industries including consumer products, financial services, technology, real estate and public sector enterprises. E&Y’s services focus on financial transformation, customer, supply chain, anti-money laundering, enterprise risk, IT risk & assurance and actuarial services.
In 2012, E&Y was named the Best Accounting Firm To Work for by Fortune magazine and due to the company’s employee friendly policies, its combined workforce in China & Hong Kong has quadrupled in past ten years. Many notable personalities in business and politics have worked for E&Y namely the co-CEO of Research In Motion, CEO of Lockheed Martin, former Prime Minister of the Netherlands, Mayor of Edison - New Jersey amongst others.
KPMG
- World’s fourth largest financial auditing services firm
- K- Klynveld, P – Peat, M – Marwick & G - Goerdeler
- KPMG divested U.S. consulting unit is now called as BearingPoint, Inc
Netherlands based, KPMG is the smallest firm among the Big Four in terms of revenues and was named after the initials of the four partners of the accounting firms that merged together to form the single company. Like others, KPMG is also a network of accounting firms & it employs over 173,965 people – consultants, analysts, specialists, partners etc.
It provides services like audit, tax – related to transfer pricing, natural resources, mergers & acquisitions, dispute resolution, controversy and advisory services. It consults auto, life sciences, infrastructure, and media companies on business effectiveness, people & organizational change, forensic, company restructuring and financial transactions.
KPMG is also considered as one of the best companies to work for and is known for its “Best Training Programmes” for employees. For the $24.44 billion company, Asia-Pacific is the strongest performing region with huge opportunities from developing markets.
SOURCES:
Big Four
Big Four Wiki
Deloitte
Deloitte: Services
PwC: Facts & Figures
PwC: Services
E&Y: Wikipedia
E&Y: Services
KPMG: Wiki
KPMG: Services