The Big Four Accounting Firms Essay

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The Big Four Accounting firms are the four largest accounting firms offering services worldwide. The Big Four firms are Deloitte, Pricewaterhousecoopers, Ernst & Young, and KPMG. These large, universal firms offer services in three different lines of service classified as assurance, tax and advisory. Additionally, these firms handle most of the audits for public companies worldwide and provides audits for many private companies. Each of the big four firms have many employees however, they are classified and taxed as limited-liability partnerships, not corporations. This means some or all of the partners have limited liability, so one partner is not liable for another partner’s misconduct or negligence. During the 1980s, the largest universal accounting firms were referenced to as the Big Eight. Throughout the years, the number of eight dwindled down to four due to various mergers and major scandals. Prior to the rising of the big four firms, there were the big eight firms which included Arthur Andersen, Coopers and Lybrand, Ernst & Whinney, Deloitte, Haskins & Sells, KPMG, Price Waterhouse, Touche Ross and Arthur Young. As the rate of mergers and acquisitions continued to grow corporate America became globalized. Corporations sought advisers skilled in many areas of accounting and problem solving skills. In 1989, to cap off the decade of mergers and acquisitions, Touche Ross and Deloitte, Haskins Sells merged. In 1989, there was another significant merger between Ernst &…

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