Big Four & Leading Accounting and Consulting Firms – news, opinion and career opportunities for aspiring & current professionals & alumni

Top 100 US Accounting Firms Reveal Decline, Glimmers of Hope

Top 100 US Accounting Firms Reveal Decline, Glimmers of Hope

Accounting Today (www.webcpa.com, http://www.webcpa.com/news/Accounting-Today-Top-100-Firms-2010-53590-1.html) came out recently with its very insightful, comprehensive and timely 2010 annual ranking of accounting firms in the US. From this wealth of data, we will focus selectively on the Big Four and Next Four firms in this blog post. Thanks to Accounting Today for collating and publishing this very useful summary.

In the lead article in this report, “Signs of growth: faint, fragile, but real”, author Daniel Hood notes, that “the revenues of the Top 100 Firms in Accounting actually shrank by 2.85 percent in 2009 — the first time they have done so since the list achieved its present format in 1994.” This is the same conclusion that we also reached in our report on the Big Four firms.

However, he also points out the optimistic side of the picture, “While the six biggest firms (those with over $1 billion in revenue) recorded decreases in revenue in 2009, the two other tiers of the Top 100 actually grew their revenue — the 20 firms with between $100 million and $1 billion by 5.23 percent, and the 74 firms with under $100 million by 3.64 percent. (See
Databank, page 5.) Given the current economic climate, those are numbers worth noting.”, which validates the title of the article, providing hope that 2010 will be a turnaround from 2009.

The Big Four

All the Big Four firms experienced a decline in sales from 2008 to 2009, with Deloitte and PricewaterhouseCoopers holding up best against a tough economic climate, and with revenues at KPMG down the most. We had similar figures and conclusions in our report “The 2009 Big Four Firms Performance Analysis”(http://bigfouralumni.blogspot.com/2010/01/2009-big-four-firms-performance.html ) which explored in great detail each of the world’s top accounting firms.

There are two very interesting insights from this data, which focuses only on the US portion of the revenue picture. Note further that all these revenues are “gross revenues” for each of the Big Four firms,

Deloitte is the largest firm in the US, well ahead of PricewaterhouseCoopers US. On a global scale however, Deloitte is just around $100 million below PwC in total 2009 global revenues. Ernst & Young maintains its third-place ranking in the US, in line with its third rank on a globab basis.

All firms had an increase in partnership ranks, however, three of the four had a decrease in number of professionals from year to year. Ernst & Young’s data in this regard seems out of sync, and as we have found in our analysis, this firm supplies only the minimum of data conducive to deep analysis.

Here’s the detail on each firm:

The largest firm in the US was Deloitte with $10.7 billion in 2009 net revenues, down 2.90% from 2008 revenues, split 37% Audit, 24% Tax, 34% Advisory and 5% Other. Deloitte has 2,968 partners, up 0.88%, 30,637 professionals, down 4.64% and 42,367 total employees, down 4.53%.

Behind Deloitte was PricewaterhouseCoopers with $8.2 billion in 2009 net revenues, down 2.60% from 2008 revenues, split 52% Audit, 32% Tax, 16% Advisory and 0% Other. The firm has 2,235 partners, up 1.68%, 22,729 professionals, up 2.85% and 31,681 total employees, up 2.47%.

Following Deloitte and PwC was Ernst & Young with $7.6 billion in 2009 net revenues, down 5.63% from 2008 revenues, split 41% Audit, 33% Tax, 23% Advisory and 5% Other. The firm has 2,500 partners, up 8.70%, 17,500 professionals, down 6.91% and 25,600 total employees, down 5.88%.

The last of the Big Four was KPMG with $5.1 billion in 2009 net revenues, down 10.62% from 2008 revenues, split 48% Audit, 27% Tax, 25% Advisory and 0% Other. The firm has 1,847 partners, up 1.60%, 15,803 professionals, down 4.59% and 22,960 total employees, down 3.99%.

The Next Four

In our recent blog post (http://bigfouralumni.blogspot.com/2010/02/next-four-bdo-rsm-grant-thornton-and.html) we explored the rankings of the Next Four firms, which are multi-billion dollar accounting and tax networks in their own right.

Again, we highlight two findings from all this information:

RSM is the largest firm in the US, well ahead of BDO US. On a global scale however, BDO is the fifth largest firm in the world, ahead of sixth-place RSM. Also Grant Thornton US is seen ahead of BDO US, though GT Global places seventh on a global revenue front, behind BDO and RSM.

Even in the next four, we are seeing a revenue decline, with RSM holding up much better than the rest. RSM’s global revenues actually increased 8%, which along with Baker Tilly was only one of the top networks to increase revenues.

Here are some details on the Next Four:

RSM / McGladrey and Pullen is the first of the Next Four with $1.5 billion in 2009 net revenues, down 0.47% from 2008 revenues, split 44% Audit, 35% Tax, 20% Advisory and 1% Other. The firm has 751 partners, up 1.76%, 5,331 professionals, down 1.48% and 7,755 total employees, down 0.27%.

Grant Thornton follows RSM / McGladrey and Pullen as second of the Next Four with $1.1 billion in 2009 net revenues, down 5.17% from 2008 revenues, split 47% Audit, 26% Tax, 27% Advisory and 0% Other. The firm has 535 partners, down 4.29%, 3,700 professionals, down 8.01 and 5,414 total employees, down 7.29%.

BDO is third in the Next Four with $0.6 billion in 2009 net revenues, down 5.92% from 2008 revenues, split 60% Audit, 25% Tax, 15% Advisory and 0% Other. The firm has 273 partners, up 2.63%, 1,849 professionals, down 13.60% and 2,712 total employees, down 10.20%.

Baker Tilly Virchow Krause is in the last place of the Next Four, with a rank of number 13 in the Accounting 100 firms ranking, and despite being ranked 8 worldwide on a total revenue basis. In June 2009, the firm was renamed Baker Tilly from Baker Tilly Virchow Krause, and in November 2009, the firm merged with Beers and Cutler of Washington, DC and this merger presumably accounts for the large percentages seen here. The US firm has $260 million in 2009 net revenues, up 20.37% from 2008 revenues, split 37% Audit, 33% Tax, 25% Advisory and 5% Other. The firm has 108 partners, up 14.89%, 1,1,48 professionals, down up 9.23% and 1.370 total employees, up 10.84%.

Accounting 100, Big Four, Deloitte, PricewaterhouseCoopers, Revenue, 2009, Drop, Partners

Comments are closed.