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. Altogether, they generated over $148 billion in revenue in 2018 alone! Though originally known for accounting, these firms actually provide a huge range of services (including consulting) and are recruiting powerhouses.
A Brief 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 operate 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.
Auditing jobs are more readily available that consulting jobs but usually offer a lower average starting salary of $53,000 (PayScale). Auditors enjoy a broader exposure to financial operations than tax accountants and frequent travel.
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.
Tax jobs are much more specialized and allow for long-term opportunities for a private tax business. The average starting salary is $53,500 (PayScale) and is a great field as long as you find taxes interesting!
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.
Consulting jobs are considered more prestigious and offer a higher average starting salary. You also enjoy better exit opportunities and a broad exposure to business strategy. Consulting opportunities are also the hardest to come by and have the lowest acceptance rate amongst Big 4 jobs.
Work Culture at the Big 4
You didn’t think you could work at one of the top firms in the world and not work hard, did you? Big 4 employees work long hours, especially during busy season for audit and tax and before big deliverable deadlines for consulting. There will be times when you need to work on weekends as well. Though there are differences amongst each firm (which we’ll get to below), overall the Big 4 firms have similar cultures and expectations from their candidates.
Your experience at each firm will actually differ more depending on the subsidiary and location. In fact, in many instances, working at any of the firms in the same city will be more similar than working for the same firm in a different city. For instance, working at Deloitte NY will likely be more similar to working at PwC NY as compared to working at Deloitte LA.
The Big 4 Details
Now that you know what the Big 4 firms do, you must be asking yourself – what’s the difference amongst these large professional service conglomerates? We’re glad you asked.
Deloitte – The Powerhouse of Powerhouses
Deloitte is the tax/audit/accounting market leader and is the largest professional services firm in the world, both in terms of revenue and number of employees. Founded in 1845, Deloitte has been able to maintain its brand after a series of mergers and reorganizations and is now one of the most sought-after companies to work for.
- Global 2018 revenue: $43 billion
- Number of employees: 280,000
- Accounting starting salary (avg.): $55,000
- Consulting starting salary (avg.): $80,000
- Acceptance rate (avg.): 7%
Deloitte Work Culture
Deloitte is known for its people who are on the whole driven, smart, and nice. The firm is consistently ranked as one of the top companies in the world to work for and is incredible staff-focused. The company has invested heavily in training facilities like Deloitte University, which the firm uses as a differentiating factor when recruiting candidates.
Though the largest Big 4 accounting firm overall, Deloitte’s audit practice is 40% smaller than PwC’s. Deloitte focuses on its other services, most notably consulting and was the only Big 4 firm to retain its full consulting capability following the Enron crisis.
As the only Big 4 firm that can be called a true consulting firm, Deloitte has a proven history of being able to pivot effectively. This entrepreneurial spirit pervades Deloitte’s culture and the company is known as the fastest moving of the Big 4. As a result, the company is known for having longer hours compared to the rest of the Big 4. If constant change and being able to take initiative are aspects you look for in a company, Deloitte is for you.
Deloitte Recent Awards
- #2 Most Prestigious Accounting Firm, The Vault (2019)
- #11 on Fortune’s 100 Best Companies to Work For (2018)
- #2 on the 2019 Vault Accounting 50 list (2019)
- #52 Forbes’ Best Employers for Diversity (2019)
- #2 on People Magazine’s Companies that Care (2018)
PwC – A Strong Second
PwC enjoys a strong second place in market share amongst the Big 4 accounting firms. The company was founded in 1849 and became PWC in 1998 when Price Waterhouse and Coopers & Lybrand agreed on a merger. PwC ranked second in Diversity Inc. magazine’s best large companies to work for.
- Global 2018 revenue: $41 billion
- Number of employees: 250,000
- Accounting starting salary (avg.): $57,500
- Consulting starting salary (avg.): $72,000
- Acceptance rate (avg.): 5%
PwC Work Culture
Ranked as the most prestigious accounting firm by Vault for seven straight years, PwC boasts the largest audit fees and biggest number of Fortune 100 audit clients. The firm continues to strengthen its lead in accounting to bolster its foothold and competitive edge.
Though all the Big 4 accounting firms are large, PwC is known for being the more fastidious, traditional, and slower moving organization, opposite to Deloitte. The company has an extremely strong core of clients, so if you’re looking for a more conventional and hierarchical company, PwC is for you.
PwC Recent Awards
- #56 on Fortune’s 100 Best Companies to Work For (2018)
- #1 Most Prestigious Accounting Firm, The Vault (2019)
- #1 on the 2019 Vault Accounting 50 list (2019)
- #42 on People Magazine’s Companies that Care (2018)
- #49 Forbes’ Best Employers for Diversity (2019)
Ernst & Young – The Up and Comer
Ernst & Young is the most globally managed of the Big 4 and has a presence in over 150 countries with more than 700 offices. EY retains a strict structure with a global board overseeing policies and maintaining consistency across its services.
Ernst & Young Statistics
- Global 2018 revenue: $35 billion
- Number of employees: 260,000
- Accounting starting salary (avg.): $59,000
- Consulting starting salary (avg.): $75,000
- Acceptance rate (avg.): 7%
Ernst & Young Work Culture
Ernst & Young bears many similarities to PwC, offering services focused on their core competencies of audit and tax, which are the second largest after PwC. The company also prides itself on its long-lasting client relationships, many of which have lasted for over 70 years.
As an important note for new hires, Ernst & Young typically offers rotational programs for 1-2 years across different specialties before employees focus on one field. If you’re looking for a diverse set of experiences immediately upon graduation in a more structured environment.
Ernst & Young Recent Awards
- #52 on Fortune’s 100 Best Companies to Work For (2018)
- #3 Most Prestigious Accounting Firm, The Vault (2019)
- #28 on the 2019 Vault Accounting 50 list (2019)
- #13 on Fortune’s 50 Best Workplaces for Parents (2018)
- #58 Forbes’ Best Employers for Diversity (2019)
KPMG – The Smallest Giant
Though the smallest of the Big 4 accounting firms, KPMG still enjoys revenues three times as much as revenue as BDO, the fifth largest accounting firm. The company was formed in 1987 through the merger of Peat Marwick International and Klynveld Main Goerdeler. Like other professional service organizations, KMPG places great value on its people and quality of service.
- Global 2018 revenue: $29 billion
- Number of employees: 210,000
- Accounting starting salary (avg.): $58,000
- Consulting starting salary (avg.): $68,000
- Acceptance rate (avg.): 5%
KPMG Work Culture
Though the smallest of the Big 4 firms, KPMG is known to have the best work-life balance amongst its employees. The company places an emphasis on employee engagement and has the lowest churn rate of the Big 4.
KPMG is somewhere between the more agile Deloitte and the old-school style of PwC. If you are looking to prioritize staying at the same company for the long term with a healthy mix of personal and professional life, KPMG will make that easiest for you.
KPMG Recent Awards
- #29 on Fortune’s 100 Best Companies to Work For (2018)
- #4 Most Prestigious Accounting Firm, The Vault (2019)
- #3 on the 2019 Vault Accounting 50 list (2019)
- #14 on Fortune’s 50 Best Workplaces for Parents (2018)
- #12 Forbes’ Best Employers for Diversity (2019)
The Future of the Big 4
There will always be a need for the professional services the Big 4 provide. 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.