Big 4 Advisory Firms

Deloitte, PriceWaterhouseCoopers(PwC), Ernst & Young (E&Y), KPMG

What Are the Big Four Advisory Firms?

The “Big 4 Advisory Firms”  refers to the four key players – the four largest companies – in the accounting industry, also commonly referred to as simply “The Big Four.” The Big Four Advisory Firms, all privately-owned, multinational corporations, are the following (listed from largest down to smallest, based on total revenues as of 2017):

  1. Deloitte
  2. PriceWaterhouseCoopers (PwC)
  3. Ernst & Young (E&Y)
  4. KPMG

big 4 advisory

The Big Four Advisory Firms offer a wide range of services such as accounting, management consultancy, tax-related services, risk assessment, and auditing. Although the Big Four are known for providing services to many Fortune 500 individuals/companies, they also serve a number of start-ups with high growth potential and small private companies.

Factors That Determine the Industry Dominance of the Big 4

The following factors determine the place of the Big 4 Advisory firms as industry leaders:

  • Size of the company
  • Economies of scale
  • Global outreach of the company
  • Reputation of the company
  • A semi-captive market

Services Provided by the Big 4 Advisory Firms

The Big 4 advisory firms provide five core services:


An audit is a process by which a client company’s financial statements are scrutinized to determine if the statements are accurate and fair. It is conducted by a team of accountants employed by the concerned firm.

The audit is one of the most important and commonly used services provided by the Big 4 Advisory firms, as all public companies are required to furnish audited financial statements to provide accurate information to investors and shareholders. Furthermore, before a bank lends a large amount of money to any company, it needs the company’s audited financial statements to ensure the safety of the money lent.

The audit team carries out the following activities to determine the accuracy of a company’s financial statements:

 Review of supporting documents

  • Review of journal entries which constitute the financials
  • Understand how important financial transactions are presented in the statements through informed discussion with the client company’s employees

After the aforementioned steps have been completed with due diligence, the accounting team issues an “opinion on financials.” The opinion on financials states the degree of confidence that the audit team has in the fairness and accuracy of the client company’s financial statements.

The opinion on financials is important information for the client company’s owners, lenders, and investors because a high degree of confidence means that the company’s financials have received the approval of the accounting firm and, thus, are considered legitimate.

Advisory/Consulting Services

Advisory/Consulting Services refers to the act of providing a third party with expert knowledge for a fee. The consulting services provided by the Big 4 include:

  • Increasing the efficiency of a company through an analysis of its processes
  • Risk management, i.e., determining the financial threats faced by the company and suggesting appropriate mitigation strategies/solutions
  • Creation of financial reporting programs that leverage the latest technology for the company
  • Creation of accounting programs that leverage the latest technology for the company

 It is important to note that, in the US, a Big 4 advisory firm providing consulting services to a company cannot provide auditing services to the same company. This is to ensure that the auditor has no financial interest in the company, and thus, will produce accurate and unbiased audit reports.

Tax-Related Services

Tax-Related Services refers to the services provided by the Big 4 Advisory firms to help their clients successfully navigate local and national tax laws. The most popular tax service provided by the Big 4 is the creation of tax avoidance strategies – helping the client to structure their transactions in a manner that creates a tax advantage for the company (such as refunds, deductions, etc.) or which minimizes tax obligations.

The tax team also helps the client company with international tax filing and regulatory filings. It also collaborates with the audit team, because the financial statements of a company include a large amount of information regarding the company’s tax filings. Together, the two teams assess the accuracy of the tax-related information disclosed by the company in its financial statements.



Transactions/deals refer to the act of carrying out and/or facilitating mergers and acquisitions, spin-offs, leveraged buyouts, divestment, etc. The Big 4 firms provide the following transaction services:

  • Assessing the accounting implications of a transaction for the client
  • Assessing and advising on the tax implications of a transaction for the client
  • Performing due diligence on the acquisition target or the section of the company being divested to ensure that the company is getting a fair deal
  • Building valuation models for the company by using appropriate financial information
  • Consulting with the client before, during, and after the deal has been carried out to ensure that the company adjusts efficiently to the changes in its working capital

Fraud investigation

The fraud investigation team travels extensively (both domestically and internationally) to help a company detect fraud and/or embezzlement. The fraud investigation team uses psychological tactics, the latest technology, and cutting-edge financial and accounting analysis to uncover fraud.

More Resources

CFI is the official global provider of the Financial Modeling and Valuation Analyst (FMVA)™ designation, designed to transform anyone into a world-class financial analyst.

The Big 4 Advisory firms are an important part of the global financial ecosystem. Find out more by clicking on the following links.

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!

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