Big Four Firms' Growth Led by Advisory Services

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By Frank Byrt

The Big Four accounting firms posted solid revenue growth in 2012 thanks to an improving global economy, increased business deal activity, and, in particular, rising demand for their advisory services, according to the "2012 Big Four Firm Performance Analysis" report by

Revenue at the Big Four – Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers – grew 6.4 percent last year over 2011, to a record $110 billion. 

That growth was led by a 12.2 percent boom in advisory services revenue at those firms. Tax revenue was up 5.6 percent, while audit revenue rose 2.9 percent. 

Also in the mix of factors contributing to the big firms' growth:

  • Improved equity markets,
  • More liquid credit conditions,
  • Stricter government regulations on financial reporting, and
  • Improved M&A and IPO activity.

By service line, auditing services accounted for 45 percent of total revenues for the Big Four last year, while advisory services made up 33 percent and tax services contributed 23 percent. 

PricewaterhouseCoopers maintained its leadership position in the Big Four in 2012 with revenue of $31.5 billion, up 7.8 percent year-over-year, just nosing out Deloitte's $31.3 billion in revenue. It saw 8.6 percent growth. 

Ernst & Young posted solid growth in placing third in the ranking, with 2012 revenues of $24.4 billion, up 6.7 percent from 2011.

KPMG remained the smallest of the Big Four, with revenue of $23 billion. It also posted the lowest rate of growth at 1.4 percent.

The appreciating US dollar last year was a headwind for all the firms, which posted generally lower growth numbers in US dollar terms than in local currency terms. KPMG, which has a big presence in Europe, was most hurt by this factor, the report said. 

From a geographic perspective, Americas' revenue for the four firms increased 9.2 percent year-over-year, following 9.9 percent growth in 2011. Revenue from Asia was also strong at 8 percent, after a 17.4 percent boom in 2011. European revenue was up slightly at 3.3 percent, a slip from last year's 4.3 percent gain, as it was hurt by high economic volatility throughout the region.

Specifically, Asia Pacific revenue grew the fastest for the Big Four, at 16.3 percent, the eighth consecutive year that area has led international growth for these firms' accounting services.

The Big Four firms cumulatively employ about 690,000 globally, after adding about 39,000 professional staffers in 2012. provides analysis and commentary on the four largest public accounting firms. You can access the full report online.

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