Editing Big Four accounting firms (section)

== History of mergers ==
Since the 1980s, numerous [[merger]]s and one major scandal involving Arthur Andersen, have reduced the number of major professional-services firms from eight to four.

=== Big Eight ===
The firms which came to be known as the "Big Eight" originated in various UK and US audit firms established in the 19th or early 20th centuries and later merged. The firms' initial international expansion was driven by the needs of British and American based [[Multinational corporation|multinationals]] for worldwide service. They expanded by forming local partnerships, or by forming alliances with local firms. [[Arthur Andersen]] was the exception: the firm originated in the United States, and then expanded internationally by establishing its own offices in other markets, including the United Kingdom.

In 1932, [[Fortune (magazine)|''Fortune'']] published an article listing the 15 largest American CPA firms by number of public corporation clients. At this point in time, Price, Waterhouse and Co. was far and away the most successful of the firms with more than double the clients compared to the firms in the second and third spots.<ref>{{cite journal |title=Certified Public Accountants |journal=Fortune |date=June 1932 |volume=5 |issue=6 |page=63}}</ref>

{| class="wikitable sortable"
|+ 1932 Largest CPA Firms in the United States
|-
! Rank !! Firm !! Number of Clients !! Most Notable Client !! Today Part of
|-
| 1 || Price, Waterhouse and Co. || 146 || [[U.S. Steel]] || PwC
|-
| 2 || Haskins and Sells || 71 || [[General Motors]] || Deloitte
|-
| 3 || Ernst and Ernst || 71 || [[Chrysler]] || EY
|-
| 4 || Peat, Marwick, Mitchell and Co. || 56 || [[International Shoe]] || KPMG
|-
| 5 || Arthur Young and Co. || 49 || [[Swift and Company]] || EY
|-
| 6 || Lybrand, Ross Bros. and Montgomery || 48 || [[AT&T]] || PwC
|-
| 7 || Touche, Niven and Co. || 27 || [[Fox Film]] || Deloitte
|-
| 8 || Arthur Andersen and Co. || 24 || [[Montgomery Ward]] || N/A
|-
| 9 || Deloitte, Plender, Griffiths and Co. || 15 || [[American Sugar Refining Company]] || Deloitte
|-
| 10 || Barrow, Wade, Guthrie and Co. || 12 || [[Texas Gulf Sulphur]] || KPMG
|-
| 11 || Audit Co. of New York || 11 || [[F. W. Woolworth Company|Woolworth]] || PwC
|-
| 12 || Loomis, Suffern and Fernald || 10 || [[Adams Express]] || PwC
|-
| 13 || F. W. Lafrentz and Co. || 10 || [[Corn Products Refining Company|Corn Products]] || KPMG
|-
| 14 || Miller, Donaldson and Co. || 8 || [[American Chicle]] || Deloitte
|-
| 15 || Leslie, Banks and Co. || 7 || American Brake Shoe and Foundry || PwC
|-
| N/A || All others || 136 || N/A || N/A
|-
| N/A || Companies not reporting names of auditors || 355 || N/A || N/A
|-
| N/A || Total || 1,056 || N/A || N/A
|}

From the 1930s through the 1950s, audit firms expanded their national sizes and their service offerings. After the [[Wall Street crash of 1929]], numerous regulations were put into place by the federal government to ensure that investors were able to view accurate and detailed financial information. As a result of the fierce competition between themselves, many of the firms merged to further expand their practices and geographic reach. These mergers led to a few name changes as the firms embraced a larger identity. In 1947, Touche, Niven and Co. merged with George Bailey and Co. and Allen R. Smart and Co. to become Touche, Niven, Bailey and Smart (TNBS). In 1950, Barrow, Wade, Guthrie and Co. merged into Peat, Marwick, Mitchell and Co., which kept the more notable PMM name. In 1955, the Audit Co. of New York merged into Price, Waterhouse and Co., again keeping PW as the firm name. In 1958, two of the firms listed on ''Fortune'' list merged into larger firms: Loomis, Suffern and Fernald was assumed by Lybrand, Ross Bros. and Montgomery while Miller, Donaldson and Co. was assumed by Haskins and Sells. Finally, in 1960, TNBS merged with the Canadian accounting firm Ross to form Touche, Ross, Bailey and Smart (later simplified in 1969 to Touche Ross).<ref>{{cite web |last1=Wooton |first1=Charles W. |last2=Wolk |first2=Carel M. |title=The Development of "The Big Eight" Accounting Firms in the United States, 1900 to 1990 |url=https://www.accountingin.com/accounting-historians-journal/volume-19-number-1/the-development-of-the-big-eight-accounting-firms-in-the-united-states-1900-to-1990/ |website=Accounting Information |access-date=14 July 2024}}</ref>

By 1960, business among the CPA firms had consolidated such that the top eight firms audited about 80% of all firms listed with the SEC. Around this time the term "Big Eight" came to be used to describe these CPA firms' dominance of the market. ''Fortune'' published an article in the same year listing these firms along with their number of partners, offices, and estimated gross revenues.<ref>{{cite journal |last1=Wise |first1=T. A. |title=The Auditors Have Arrived: Part I |journal=Fortune |date=November 1960 |volume=62 |issue=5 |page=152}}</ref>

{| class="wikitable sortable"
|+ Big Eight Firms in 1960
|-
! Rank !! Firm !! Number of Partners !! Number of Offices !! Est. Gross Revenue (millions USD)
|-
| 1 || Peat, Marwick, Mitchell and Co. || 190 || 60 || 45
|-
| 2 || Arthur Andersen and Co. || 171 || 28 || 40
|-
| 3 || Ernst and Ernst || 132 || 95 || 36
|-
| 4 || Price, Waterhouse and Co. || 101 || 40 || 35
|-
| 5 || Haskins and Sells || 176 || 36 || 33
|-
| 6 || Lybrand, Ross Bros. and Montgomery || 126 || 35 || 28
|-
| 7 || Arthur Young and Co. || 104 || 28 || 26
|-
| 8 || Touche, Ross, Bailey and Smart || 71 || 27 || 17
|}

In the following 20 years, the consolidation pattern continued. The two remaining firms from the top 15 in 1932 outside of the Big Eight in 1960 were merged in 1963 and 1967, respectively: F. W. Lafrentz and Co. with Main and Co. to form Main Lafrentz and Co. (later merging with Thomson, McLintock and Co., a British firm, to form McLintock Main Lafrentz International or MMLI in 1969) and Leslie, Banks and Co. into Lybrand, Ross Bros. and Montgomery. Six years later, in 1973, LRBM merged with the British Cooper Bros. and Co. to form Coopers and Lybrand. In 1978, Deloitte, Plender, Griffiths and Co. merged with Haskins and Sells to become Deloitte, Haskins and Sells and one year later Ernst and Ernst merged its practice with Whinney, Murray and Co. to become Ernst and Whinney.<ref>{{Cite web |title=What's in a name: Firms' simplified family trees on the web |url=https://www.icaew.com/library/historical-resources/guide-to-historical-resources/firm-histories/whats-in-a-name |website=icaew.com}}</ref>  As 1980 arrived, the Big Eight were known as the following:

* [[Arthur Andersen]]
* [[Ernst & Young|Arthur Young]]
* [[Coopers & Lybrand]]
* [[Deloitte, Haskins & Sells]]
* [[Ernst & Young|Ernst & Whinney]]
* [[KPMG|Peat, Marwick, Mitchell and Co.]]
* [[Price, Waterhouse and Co.]]
* [[Deloitte|Touche Ross]]

In the 1980s the Big Eight, each with global branding, adopted modern marketing and grew rapidly. They merged with many smaller firms. KPMG was the result of one of the largest of these mergers. In 1987, Peat Marwick merged with the Klynveld Main Goerdeler group (which included the aforementioned MMLI) to become KPMG Peat Marwick, rebranding in 1995 to simply KPMG.

=== Big Six ===
Competition among these firms intensified, and the Big&nbsp;Eight became the Big&nbsp;Six in 1989. In that year, Ernst & Whinney merged with Arthur Young to form Ernst & Young in June, and Deloitte, Haskins & Sells merged with Touche Ross to form Deloitte & Touche in August.

The Big Six after both mergers occurred were:

*Arthur Andersen
*Coopers & Lybrand
*Deloitte & Touche
*Ernst & Young
*KPMG
*Price Waterhouse

There has been some merging of ancestor firms, in some localities, which would aggregate brands belonging to the Big Four today, but in different combinations than the present-day names would otherwise suggest. For example, the United Kingdom local firm of Deloitte, Haskins & Sells merged instead with the United Kingdom firm of Coopers & Lybrand. The resulting firm was called Coopers & Lybrand Deloitte, and the local firm of Touche Ross kept its original name. It was not until the mid-1990s that both UK firms changed their names to match those of their respective international organizations. Meanwhile, in Australia, the local firm of Touche Ross merged instead with KPMG.<ref>{{Cite web|url=http://www.deloitte.com/dtt/article/0,1002,cid%253D12279,00.html|title=missing|access-date=2008-08-06|archive-date=2007-11-29|archive-url=https://web.archive.org/web/20071129162108/http://www.deloitte.com/dtt/article/0,1002,cid%253D12279,00.html|url-status=dead}}</ref><ref>{{Cite news |last=Cowan |first=Alison Leigh |date=1989-12-05 |title=Deloitte, Touche Merger Done |work=The New York Times |url=https://www.nytimes.com/1989/12/05/business/deloitte-touche-merger-done.html}}</ref> It is for these reasons that the Deloitte & Touche international organization was known as DRT International (later DTT International), to avoid use of names which would have been ambiguous, as well as contested, in certain markets.{{citation needed|date=September 2021}}

=== Big Five ===
In July 1998, the Big Six became the Big&nbsp;Five when Price Waterhouse merged with Coopers & Lybrand to form PricewaterhouseCoopers.

The Big Five at this point in time were:<ref>{{Cite web|url=https://big4accountingfirms.com/big-5-accounting-firms/|title=Big 5 Accounting Firms * (Deloitte, EY, KPMG, Pricewaterhouse...)}}</ref>

*Arthur Andersen
*Deloitte & Touche
*Ernst & Young
*KPMG
*PricewaterhouseCoopers

=== Big Four ===
Finally, the insolvency of Arthur Andersen stemming from their involvement in the [[Enron scandal|2001 Enron Scandal]] produced the Big Four:

*[[Deloitte|Deloitte & Touche]] (now known as Deloitte)
*[[Ernst & Young]] (now known as EY)
*[[KPMG]]
*[[PwC]]

The [[Enron]] collapse and ensuing investigation prompted scrutiny of the company's financial reporting and its long time auditor, Arthur Andersen. The company was indicted for obstruction of justice for shredding documents related to the audit of Enron. The resulting conviction, although [[Arthur Andersen LLP v. United States|later overturned]], doomed Arthur Andersen, because most clients dropped the firm, and the company was not allowed to take on new clients while they were under investigation. Most of Arthur Andersen's international practices were sold to members of what is now the Big Four – notably EY globally; Deloitte in the United Kingdom, Canada, Spain, and Brazil; and PwC in China and Hong Kong.

=== Big Four merger history ===
The Big Four were all derived from a series of global mergers. The charts below show year of formation through merger, or adoption of single brand name.

{{chart top|collapsed=yes|Deloitte}}
{{Tree chart/start|align=center}}
{{Tree chart| | | | | |DTT|DTT=Deloitte&nbsp;Touche&nbsp;Tohmatsu&nbsp;(1989)<br />(''Deloitte&nbsp;&&nbsp;Touche'' until 1993)}}
{{Tree chart| |,|-|-|-|-|^|-|-|.|}}
{{Tree chart|DHS| | | | | |TR|DHS=Deloitte&nbsp;Haskins<br />& Sells (1978)|TR=Touche Ross (1975)}}
{{Tree chart| |)|-|-|-|.| | | |)|-|-|-|.}}
{{Tree chart|DC| |HS| |TR2| | |TC|DC=Deloitte & Co<br />(UK) (1845)|HS=Haskins & Sells<br />(US) (1895)|TR2=Touche Ross (1960)<br />(''Touche,&nbsp;Ross,&nbsp;Bailey<br />& Smart'' until 1969)|TC=Tohmatsu&nbsp;&&nbsp;Co<br />(Japan)&nbsp;(1968)}}
{{Tree chart| | | | |,|-|-|-|v|^|-|-|.}}
{{Tree chart| | | |RC| |GAT| |TNBS|RC=Ross (Canada)|GAT=George A. Touche (UK)|TNBS=Touche,&nbsp;Niven,&nbsp;Bailey<br />& Smart (US) (1947)}}
{{Tree chart| | | | | | | | |,|-|-|-|(|}}
{{Tree chart| | | | | | | |TN| |BS|TN=Touche Niven (1900)|BS=Bailey & Smart (1947)}}
{{Tree chart/end}}
{{chart bottom}}

{{chart top|collapsed=yes|EY}}
{{Tree chart/start|align=center}}
{{Tree chart| | | | | | | | |EY|EY=Ernst&nbsp;&&nbsp;Young&nbsp;(EY)&nbsp;(1989)<br />(''Ernst & Young'' until 2013)}}
{{Tree chart| | | | | |,|-|-|-|^|-|-|.|}}
{{Tree chart| | | | |AY| | | | |EW|AY=Arthur Young (1985)|EW=Ernst & Whinney (EY) (1979)}}
{{Tree chart| |,|-|-|-|+|-|-|.| | | |)|-|-|-|-|.|}}
{{Tree chart|AYMM| |AYBP| |SY| |EE| |WSH|AYMM=Arthur&nbsp;Young,&nbsp;McLelland,<br />Moores & Co (1968)|AYBP=Arthur Young Broads<br />Paterson & Co (1923)|SY=Stuart & Young<br />(1894)|EE=Ernst & Ernst<br />(US) (1903)|WSH=Whinney, Smith &<br />Whinney&nbsp;(UK)&nbsp;(1849)}}
{{Tree chart/end}}
{{chart bottom}}

{{chart top|collapsed=yes|KPMG}}
{{Tree chart/start|align=center}}
{{Tree chart| | | | | | | | | | | | | | | |KPMG|KPMG=KPMG&nbsp;(1987)<br />(''KPMG&nbsp;Peat&nbsp;Marwick''<br />before 1995)}}
{{Tree chart| | | | | | | | |,|-|-|-|-|-|-|-|+|-|-|-|.}}
{{Tree chart| | | | | | | |PM| | | | | | |KMG| |AN|PM=Peat&nbsp;Marwick&nbsp;(1925)<br />(originally&nbsp;''Peat<br />Marwick Mitchell'')|KMG=KMG&nbsp;(1979)<br />(officially&nbsp;''Klynveld<br />Main&nbsp;Goerdeler'')|AN=Armitage&nbsp;&&nbsp;Norton<br />(1869–1987)}}
{{Tree chart| |,|-|-|-|v|-|-|+|-|-|-|-|.| | | |)|-|-|v|-|-|-|.}}
{{Tree chart|WBP| |MM| |EG| |BA| |KK| |MML| |DTG|WBP=William Barclay<br />Peat (UK) (1870)|MM=Marwick Mitchell<br />(US) (1897)|EG=Edwin Gurthie<br />(1875–1955)|BA=Beevers & Adgie<br />(1849–1967)|KK=Klynveld Kraayenhof<br />(Netherlands) (1917)|MML=McLintock Main<br />Lafrentz (1964)|DTG=Deutsche&nbsp;Treuhand-Gesellschaft<br />(Germany) (1890)}}
{{Tree chart| | | | | | | | | | | | | | | | | | | | |)|-|-|.}}
{{Tree chart| | | | | | | | | | | | | | | | | | | |TM| |ML|TM=Thomson McLintock<br />(UK) (1877)|ML=Main Lafrentz<br />(US) (c.1880)}}
{{Tree chart| | | | | | | | | | | | | | | | | | | |)|-|-|-|.}}
{{Tree chart| | | | | | | | | | | | | | | | | | |MF| |GR|MF=Martin Farlow<br />(1882–1968)|GR=Grace Ryland<br />(1967–1969)}}
{{Tree chart| | | | | | | | | | | | | | | | | | | |,|-|-|-|(}}
{{Tree chart| | | | | | | | | | | | | | | | | |GDT| |CJR|GDT=Grace, Darbyshire,<br />& Todd (1818)|CJR=CJ Ryland (1910)}}
{{Tree chart/end}}
{{chart bottom}}

{{chart top|collapsed=yes|PwC}}
{{Tree chart/start|align=center}}
{{Tree chart| | |PwC|PwC=PricewaterhouseCoopers&nbsp;(PwC)&nbsp;(1998)<br />(''PricewaterhouseCoopers'' until 2010)}}
{{Tree chart| |,|-|^|-|.|}}
{{Tree chart|CL| |PW|CL=Coopers & Lybrand<br />(1973)|PW=Price Waterhouse<br />(US) (1849)}}
{{Tree chart| |)|-|-|-|.|}}
{{Tree chart|CB| |LRBM|CB=Cooper Brothers<br />(UK) (1854)|LRBM=Lybrand, Ross Bros,<br />Montgomery (US) (1898)}}
{{Tree chart/end}}
{{chart bottom}}