The Titans of Accounting
The Titans of Accounting
Accounting is not a foreign field for you to hear, as shown by many people that are interested in working as an accountant. Becoming an accountant is not easy. Instead, they must be thorough and structured. Becoming an accountant in a company is also not easy. Certainly, the term Big 4 is very famous for accountants because those are the titans of accounting and consulting in the world. This term is used because of its huge size, good reputation, and famous worldwide. Based on the highest revenue in 2018, the first firm is Deloitte ($43billion dollars), the second firm is PWC ($41 billion dollars), the third firm is Ernst & Young (35 billion dollars), and the fourth is KPMG ($29 billion dollars).
Big 4 used to have 8 big firms, which are: Arthur Andersen, Arthur Young & Co., Coopers & Lybrand, Ernst & Whinney, Deloitte, Haskins & Sells, KPMG, Touche Ross, and Price Waterhouse.
In 1989, two firms were merged from Big 8 into Big 6 because Ernst & Whinney merged with Arthur Young to form Ernst & Young. Also, Deloitte merged with Haskins & Sells with Touche Ross to form Deloitte Touche. Next, in 1998, Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers, which is now famously known as PwC. Therefore, it became a Big 5. Lastly, in 2002, one firm merged due to a bad situation with Arthur Andersen after a world-shocking Enron scandal. As a result, it is known as the Big 4.
Big 4 companies are CPA (Certified Public Accounting) companies where they mostly have to audit the financial statements of outside companies such as the United States with publicly traded shares. In Big 4 companies, there are three areas that are prioritized in the company, namely Auditor, Taxation, and Consulting. However, apart from these three areas, Big 4 companies also have other fields such as Actuarial, Advisory, Legal Service, and Company Finance. Every company from the Big 4 has an entity that can coordinate the activities of several groups in order to become a company.
There are three main sources of revenue that are provided by Big 4, which are by auditing – Assurance & AERS (Audit and Risk Enterprise Services) where it is an independent service company that has a high quality of information so that it can be used to make a better decision. Second, consulting service who have a professional soft skill for being a good consultant to make sure that all of the financial statements are ready to distribute it for the company to analyze. Third, tax services where they provide various services to help the company manage related taxes, for instance, plan, calculate, pay, and report all of the taxes incurred in the period.
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