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"In the age of big data, accounting is no longer just about the numbers; it's about using financial information to guide strategic decision-making." - Marcus Aurelius
In recent times, accounting firms have provided businesses with not only generalized tasks like bookkeeping, tax preparation, mergers & acquisitions, and financial statement audits but also specialized services offering invaluable financial insights and consulting services like Estate planning, Virtual CFO Services, Tax franchise services, and the like.
This shift enables businesses to focus on core operations and strategic decision-making, thus improving profitability and achieving long-term goals efficiently.
Founded in 1845, Deloitte is the world's largest professional services network by revenue. They serve a diverse range of industries offering a broad range of services including audit, tax, financial advisory, and consulting being one of their strong suits.
Formed in 1998 through a merger, PwC is a leader in auditing and tax. They also offer consulting and advisory services, with a strong presence in technology and financial services.
Established in 1989 through a merger, EY is known for its assurance and advisory services. They provide a full range of services, including tax and consulting, with a focus on emerging markets.
Formed in 1987 through a merger, KPMG is a tax powerhouse. They offer a full range of services, including audit, consulting, and advisory services.
Deloitte has a long history working with royalty, having audited the British Royal Family's finances since 1901.
PwC was the first of the Big Four to establish a global network, recognizing the growing importance of international business early on.
EY was the first of the Big Four to establish a presence in all BRICS countries (Brazil, Russia, India, China, and South Africa).
KPMG has a long-standing relationship with the Olympics, acting as the official auditor for the International Olympic Committee since 1988.
This table provides a quick snapshot of the Big Four's size and global reach.
Source - Statista
Here's a combined picture of the Big Four's dominance across various metrics:
Market Share: The Big Four hold a staggering over 60% of the total market share for professional services like audit, tax, and consulting for publicly traded companies. Specifically, they audit a whopping 88% of large accelerated filers public companies with a market capitalization of over $700 million in the US, according to Audit Analytics.
Global Reach: Collectively, they employ over 1.2 million professionals across over 550 countries and territories, demonstrating their extensive global network.
Here are some of the top contenders, each with their unique strengths offering compelling alternatives for businesses seeking a tailored fit:
The world's fifth-largest accounting network, BDO USA offers a client-centric approach and a strong focus on privately held businesses. They are a leader in the real estate and construction industries, providing a full spectrum of services from audit and tax to valuations and risk advisory.
This dynamic firm is the sixth-largest accounting firm in the US and prides itself on a culture of agility and innovation. Their expertise lies in serving the middle market, with particular strength in the technology, healthcare, and manufacturing industries.
This global network is known for its relationship-driven approach and focus on mid-market companies. They excel in providing a comprehensive range of services including audit, tax, and advisory, often at a more competitive price point than the Big Four.
This top-ten accounting firm is a powerhouse in the healthcare industry. Their expertise lies in understanding the complex regulatory environment and providing specialized services tailored to healthcare providers.
Formerly known as Mayer Hoffman McCann (MHM), CBIZ is a top-ten accounting provider with a growing presence. They are a leader in valuation services, particularly for family-owned businesses and employee stock ownership plans (ESOPs). Additionally, they offer a wide range of services including tax, audit, and consulting, with a focus on the middle market.
This US-based accounting firm is a leader in serving agricultural and food processing businesses. They have a deep understanding of the unique challenges faced by these industries and offer a comprehensive range of services including audit, tax, consulting, and business advisory services.
These Big players have established a reputation for quality and expertise in the industry making them the natural choice for many large companies seeking audit and consulting services. The sheer size and resources of the power players however create significant barriers for smaller firms. They invest heavily in technology, talent, and global reach, making it difficult for competitors to keep pace.
Nevertheless, while these top accounting firms offer prestige and other perks, there are certain advantages of alternate, albeit smaller, accounting firms that cannot be disregarded:
Cost-Effectiveness: The emerging players often lower fees compared to the Big Four.
Personalized Service: More focused on relationship-building with clients and offering tailor-made services.
Industry Expertise: Deep understanding of the client’s specific industry's needs.
Agility and Innovation: Quicker response times and adaptation to new trends away from the organization’s set ways.
Size Matters: Match your firm's size and needs with the accounting firm's capabilities. A smaller firm might offer a more personalized touch, while larger firms handle complex needs.
Industry Expertise: Seek a firm with experience in your industry. Their understanding of specific regulations and challenges can be invaluable.
Fee Factor: Compare fees and service packages. Get quotes and ensure the services align with your budget.
Culture Check: Choose a firm whose values and communication style mesh well with your company culture.
Service Offerings: Ensure the firm offers the specific services you require, whether it's international tax expertise or forensic accounting.
By exploring these alternatives and considering these key points, you can find the perfect accounting partner to propel your business forward.
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Nicholas Branson, CPA
Shawn Parikh
