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The Big Four controls two thirds of the global accounting market

Posted by | February 27, 2015 | Big 4 Accounting firms, FTSE 100 companies, Latest Audit Information & News, Sarbanes-Oxley

Audit International, the leading specialists in Internal and External Audit Recruitment across Europe, the US and Asia have learned “The Big Four” controlled two thirds of global accounting market share in 2014 with a combined $120.2bn in fee income. Recently published figures show that all of the Big Four have increased fee income. In 2013 Deloitte reported fee income of $32.4bn, just ahead of PwC with $32bn. EY came in third with $25.9bn, followed by KPMG with $23.4bn.

According to recent publications, Deloitte retains its lead over PwC with £22.53bn in global income. It is the first time the global accounting network has retained number one spot in consecutive years, beating rival PwC by $248m. However, Price Waterhouse Coopers, is yet to see the impact of the acquisition of global consultancy Booz & Co, which was finalised in the last few months of its 2014 financial year.

As long as the gap between the top two firms has narrowed, the gap between them and third ranked EY has been increasing – from $1.9bn in 2004 to $6.5bn in 2014. EY reported fee income of $27.3bn and fourth ranked KPMG $24.8bn in 2014. Furthermore, the gap between the Big Four and the nearest competitor, BDO, has widened by over $7bn in the past decade from $10.6bn in 2004 to $17.8bn in 2014, according to the survey of global accounting firms conducted by International Accounting Bulletin (IAB).

Altogether 52 top international accounting networks and associations earned a combined $181.7bn in fees in 2014, up 6% year-on-year. In the past few years advisory and strategic acquisitions have driven mentioned growth. Recently published report shows that since 2004 the Big Four combined have increased their advisory revenues by over $33bn while audit and accounting revenues increased by $14bn and tax work revenues by $10.2bn in the same time period. Previously mentioned M&A was one of the main drivers of growth for the largest firms, with deals such as the PwC acquisition of Booz & Co., EY’s acquisition of The Parthenon Group as well as its merger with KPMG Denmark, and KPMG’s many consultancy and analytics business acquisitions in the US and Europe.

 

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