Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

If the Big 4 were split up along audit, tax, and consulting lines, they would be the Big 12

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Just how big are the Big 4? They are really big.

If we took our magic wand and split up each firm along 3 product lines, the resulting firms would be larger than the currently fifth largest firm.

If we took those Big 12 firms and waved our magic wand again to split each of the 4 audit firms in half, the former Big 4 would make up 16 of the 18 largest firms.

Here is some more info. The breakout of the seven biggest firms along product lines, as reported by the Accounting Today magazine I mentioned earlier.

A&A tax MAS other
Deloitte 29 18 48 5
PwC 41 28 31 0
Ernst & Young 36 29 28 7
KPMG 34 28 38 0
McGladrey 41 36 22 1
Grant Thornton 41 28 31 0
BDO 58 32 10 0


What’s that looks like in dollar terms? I did the math:

revenue A&A tax MAS other
Deloitte       14,908         4,323         2,683          7,156             745
PwC        11,724          4,807         3,283         3,634               –
Ernst & Young         9,900          3,564          2,871          2,772             693
KPMG         6,870          2,336         1,924          2,611               –
McGladrey          1,471             603            529             324               15
Grant Thornton          1,383             567            387             429               –
BDO             833             483             267               83               –


So, back to my headline.

If the Big 4 were split neatly along the reported A&A, tax, and MAS lines, those 12 firms would each be larger than the currently 5th largest firm at $1,471M.

If the ‘other’ of Deloitte and E&Y were each spun off into their own firm, each of them would displace the current 8th largest, Crowe Horwath, at $687M.

Furthermore, if we split the Big 4 into 12, spun off the 2 ‘others’ and then split the resulting 4 audit-only firms in half, we would have 18 firms. Only McGladrey, Grant, and BDO would be larger than any one of those pieces. The resulting 18 firms would be 18 of the 21 largest firms.

The sheer size of the firms is staggering.

Written by Jim Ulvog

March 19, 2015, 15:13 pm at 3:13 pm

Posted in Accounting, Audits

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2 Responses

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  1. Jim, Am I reading this correctly? Deloitte Consulting has exceeded its Audit practice in revenue in US? I do not think that is yet true on a global basis. (See their global transparency reports on the respective global sites.) KPMG too? (All the firms do not split things up and report numbers in the same categories, I am afraid.)

    Francine McKenna (@retheauditors)

    March 19, 2015, 15:19 pm at 3:19 pm

    • Francine –

      Those are the percentages listed by Accounting Today: 29 / 18 /48 / 5. No footnote elaborating on their split.

      KPMG as well: 34 /28 / 38 / 0, although there is a footnote that KPMG changed their methodology for inter-function work so the percentage is not comparable to last year.


      Jim Ulvog

      March 19, 2015, 15:24 pm at 3:24 pm

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