The Big Four are the four largest professional services networks in the world: Deloitte, EY, KPMG, and PwC. The four are grouped because of their large sizes relative to their competitors, both in terms of revenue and workforce headcount; they are likewise considered comparable in their ability to provide consistent and reliable professional services to their clients. Colloquially, their networks are considered of parity to those seeking careers in the services offered by these firms because of the frequency with which they engage with Fortune 500 companies.

The Big Four offer audit, assurance, taxation, management consulting, valuation, market research, actuarial, corporate finance, and legal services to their clients. A significant majority of the audits of public companies, as well as many audits of private companies, are conducted by these four networks. Until the late 20th century, the market for these professional services was dominated by eight firms, which were accordingly nicknamed the Big Eight. The Big Eight consisted of Arthur Andersen, Arthur Young, Coopers & Lybrand, Deloitte Haskins and Sells, Ernst & Whinney, Peat Marwick Mitchell, Price Waterhouse, and Touche Ross.

The Big Eight gradually evolved into the Big Four due to mergers between some of these firms, and culminated in the 2002 collapse of Arthur Andersen, leaving four networks dominating the market at the turn of the 21st century. In the United Kingdom in 2011, it was reported that the Big Four account for the audits of 99% of the companies in the FTSE 100 Index, and 96% of the companies in the FTSE 250 Index, an index of the leading mid-cap listing companies. This high level of industry concentration has caused concern among critics, and is the chief reason some notable people of business have expressed the desire for government bodies such as the UK's Competition & Markets Authority (CMA) to consider breaking up the Big Four.

Legal structure None of the "firms" within the Big Four is actually a single firm; rather, they are professional services networks. Each is a network of firms, owned and managed independently, which have entered into agreements with the other member firms in the network to share a common name, brand, intellectual property, and quality standards. Each network has established a global entity to co-ordinate the activities of the network.

Until 2020, KPMG was the only Big Four firm not registered as a UK private company, but rather the co-ordinating entity was a Swiss association (verein). However, KPMG International changed its legal structure from a verein to a co-operative under Swiss law in 2003, (Registration Number CH-020.6.900.276-5) then to a UK limited company in 2020. For Deloitte, PwC and Ernst & Young, the co-ordinating entity is a UK limited company. Those entities do not themselves perform external professional services, nor do they own or control the member firms. Nevertheless, these networks colloquially are referred to as "firms" for the sake of simplicity and to reduce confusion with lay-people. These accounting and professional services networks are similar in nature to how law firm networks in the legal profession work.

In many cases, each member firm practises in a single country, and is structured to comply with the regulatory environment in that country.

Ernst & Young also includes separate legal entities which manage its three geographic areas: the Americas, Asia-Pacific, and EMEIA (Europe, the Middle East, India and Africa) groups. These entities coordinate services performed by local firms within their respective areas, but do not perform services or hold ownership in the local entities. There are rare exceptions to this convention; in 2007, KPMG announced a merger of four internationally distinct member firms (in the United Kingdom, Germany, Switzerland and Liechtenstein) to form a single firm, KPMG Europe LLP.

History of mergers Since the 1980s, numerous mergers, and one major scandal involving Arthur Andersen, have reduced the number of major professional-services firms from eight to four.

Big Eight The firms which came to be known as the "Big Eight" originated in various UK and US audit firms established in the 19th or early 20th centuries and later merged. The firms' initial international expansion was driven by the needs of British and American based multinationals for worldwide service. They expanded by forming local partnerships, or by forming alliances with local firms. Arthur Andersen was the exception: the firm originated in the United States, and then expanded internationally by establishing its own offices in other markets, including the United Kingdom.

In 1932, Fortune published an article listing the 15 largest American CPA firms by number of public corporation clients. At this point in time, Price, Waterhouse and Co. was far and away the most successful of the firms with more than double the clients compared to the firms in the second and third spots.

+ 1932 Largest CPA Firms in the United States Rank Firm Number of Clients Most Notable Client Today Part of 1 Price, Waterhouse and Co. 146 U.S. Steel PwC 2 Haskins and Sells 71 General Motors Deloitte 3 Ernst and Ernst 71 Chrysler EY 4 Peat, Marwick, Mitchell and Co. 56 International Shoe KPMG 5 Arthur Young and Co. 49 Swift and Company EY 6 Lybrand, Ross Bros. and Montgomery 48 AT&T PwC 7 Touche, Niven and Co. 27 Fox Film Deloitte 8 Arthur Andersen and Co. 24 Montgomery Ward N/A 9 Deloitte, Plender, Griffiths and Co. 15 American Sugar Refining Company Deloitte 10 Barrow, Wade, Guthrie and Co. 12 Texas Gulf Sulphur KPMG 11 Audit Co. of New York 11 Woolworth PwC 12 Loomis, Suffern and Fernald 10 Adams Express PwC 13 F. W. Lafrentz and Co. 10 Corn Products KPMG 14 Miller, Donaldson and Co. 8 American Chicle Deloitte 15 Leslie, Banks and Co. 7 American Brake Shoe and Foundry PwC N/A All others 136 N/A N/A N/A Companies not reporting names of auditors 355 N/A N/A N/A Total 1,056 N/A N/A

From the 1930s through the 1950s, audit firms expanded their national sizes and their service offerings. After the Wall Street crash of 1929, numerous regulations were put into place by the federal government to ensure that investors were able to view accurate and detailed financial information. As a result of the fierce competition between themselves, many of the firms merged to further expand their practices and geographic reach. These mergers led to a few name changes as the firms embraced a larger identity. In 1947, Touche, Niven and Co. merged with George Bailey and Co. and Allen R. Smart and Co. to become Touche, Niven, Bailey and Smart (TNBS). In 1950, Barrow, Wade, Guthrie and Co. merged into Peat, Marwick, Mitchell and Co., which kept the more notable PMM name. In 1955, the Audit Co. of New York merged into Price, Waterhouse and Co., again keeping PW as the firm name. In 1958, two of the firms listed on the Fortune list merged into larger firms: Loomis, Suffern and Fernald was assumed by Lybrand, Ross Bros. and Montgomery while Miller, Donaldson and Co. was assumed by Haskins and Sells. Finally, in 1960, TNBS merged with the Canadian accounting firm Ross to form Touche, Ross, Bailey and Smart (later simplified in 1969 to Touche Ross).

By 1960, business among the CPA firms had consolidated such that the top eight firms audited about 80% of all firms listed with the SEC. Around this time the term "Big Eight" came to be used to describe these CPA firms' dominance of the market. Fortune published an article in the same year listing these firms along with their number of partners, offices, and estimated gross revenues.

+ Big Eight Firms in 1960 Rank Firm Number of Partners Number of Offices Est. Gross Revenue (millions USD) 1 Peat, Marwick, Mitchell and Co. 190 60 45 2 Arthur Andersen and Co. 171 28 40 3 Ernst and Ernst 132 95 36 4 Price, Waterhouse and Co. 101 40 35 5 Haskins and Sells 176 36 33 6 Lybrand, Ross Bros. and Montgomery 126 35 28 7 Arthur Young and Co. 104 28 26 8 Touche, Ross, Bailey and Smart 71 27 17

In the following 20 years, the consolidation pattern continued. Two of the three remaining firms from the top 15 in 1932 outside of the Big Eight in 1960 were merged in 1963 and 1967, respectively: F. W. Lafrentz and Co. with Main and Co. to form Main Lafrentz and Co. (later merging with Thomson, McLintock and Co., a British firm, to form McLintock Main Lafrentz International or MMLI in 1969) and Leslie, Banks and Co. into Lybrand, Ross Bros. and Montgomery. Six years later, in 1973, LRBM merged with the British Cooper Bros. and Co. to form Coopers and Lybrand. In 1978, Deloitte, Plender, Griffiths and Co. merged with Haskins and Sells to become Deloitte, Haskins and Sells and one year later Ernst and Ernst merged its practice with Whinney, Murray and Co. to become Ernst and Whinney. As 1980 arrived, the Big Eight were known as the following:

Arthur Andersen Arthur Young Coopers & Lybrand Deloitte, Haskins & Sells Ernst & Whinney Peat, Marwick, Mitchell and Co. Price, Waterhouse and Co. Touche Ross

In the 1980s the Big Eight, each with global branding, adopted modern marketing and grew rapidly. They merged with many smaller firms. KPMG was the result of one of the largest of these mergers. In 1987, Peat Marwick merged with the Klynveld Main Goerdeler group (which included the aforementioned MMLI) to become KPMG Peat Marwick, rebranding in 1995 to simply KPMG.

Big Six Competition among these firms intensified, and the Big Eight became the Big Six in 1989. In that year, Ernst & Whinney merged with Arthur Young to form Ernst & Young in June, and Deloitte, Haskins & Sells merged with Touche Ross to form Deloitte & Touche in August.

The Big Six after both mergers occurred were:

Arthur Andersen Coopers & Lybrand Deloitte & Touche Ernst & Young KPMG Price Waterhouse

There has been some merging of ancestor firms, in some localities, which would aggregate brands belonging to the Big Four today, but in different combinations than the present-day names would otherwise suggest. For example, the United Kingdom local firm of Deloitte, Haskins & Sells merged instead with the United Kingdom firm of Coopers & Lybrand. The resulting firm was called Coopers & Lybrand Deloitte, and the local firm of Touche Ross kept its original name. It was not until the mid-1990s that both UK firms changed their names to match those of their respective international organizations. Meanwhile, in Australia, the local firm of Touche Ross merged instead with KPMG. It is for these reasons that the Deloitte & Touche international organization was known as DRT International (later DTT International), to avoid use of names which would have been ambiguous, as well as contested, in certain markets.

Big Five In July 1998, the Big Six became the Big Five when Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers.

The Big Five at this point in time were:

Arthur Andersen Deloitte & Touche Ernst & Young KPMG PricewaterhouseCoopers

Big Four Finally, the insolvency of Arthur Andersen stemming from their involvement in the 2001 Enron Scandal produced the Big Four:

Deloitte & Touche (now known as Deloitte) Ernst & Young (now known as EY) KPMG PwC

The Enron collapse and ensuing investigation prompted scrutiny of the company's financial reporting and its long time auditor, Arthur Andersen. The company was indicted for obstruction of justice for shredding documents related to the audit of Enron. The resulting conviction, although later overturned, doomed Arthur Andersen, because most clients dropped the firm, and the company was not allowed to take on new clients while they were under investigation. Most of Arthur Andersen's international practices were sold to members of what is now the Big Four – notably EY globally; Deloitte in the United Kingdom, Canada, Spain, and Brazil; and PwC in China and Hong Kong.

Big Four merger history