EXECUTIVE SUMMARY After an extraordinary period of continuous revenue growth from the early 2000s to 2008, combined revenue for the four firms in fiscal 2009 fell by 7% from fiscal 2008 in US dollar terms. Revenue decreases in US dollar percentage terms ranged from negative 5% for Deloitte to negative 7% each for Ernst & Young and PricewaterhouseCoopers to negative 11% for KPMG.

In 2010, the situation improved remarkably, with $95 billion combined revenue for the four firms in fiscal 2010 increasing 1.4% from $94 billion in fiscal 2009 in US dollar terms. Revenue increases in US dollar percentage terms ranged from negative 0.9% for Ernst & Young, 1.5% for PwC, 1.8% for Deloitte and 2.6% for the fastest-grower, KPMG. KPMG also had positive growth in all its three regions and narrowed its revenue gap with E&Y. E&Y was the only firm whose full year revenues shrank, though the firm indicated that the second half of the fiscal year was much stronger, especially in Advisory and TAS.

The big story of 2010 was that Deloitte with its 1.8% growth was able to beat PricewaterhouseCoopers with its 1.5% growth to gain first place and become the largest accounting firm on the planet. In 2009, PwC was narrowly ahead of Deloitte, but Deloitte’s 2010 revenues of $26.578 billion was ahead of PwC’s 2010 revenues of $26.569 billion by an ultra-slim, but very significant, $9 million. Ernst & Young took the third spot at $21.3 billion, and KPMG maintained its position as the smallest of the Big Four firms at $20.6 billion, but narrowed the gap against E&Y.


- 2010 Marks Return To Moderate Growth As Global Economies Recover 

(Diagram  1)

- After declining 7% in 2009, combined revenue increased 1.4% in 2010, aided by a global recovery

- These large accounting firms posted some big numbers in 2010, their combined revenues was an eye-popping $95 billion (Diagram 1)

- The Big Story Of 2010: Deloitte beat PwC to  first place to become the largest accounting firm on the planet. The margin - only $9 million

- Combined firm revenues grew 14% CAGR from 2004 to 2008 and 8% CAGR from 2004 to 2010. (Diagram  2) 

(Diagram  2)








In general, the firms’ results met our expectations. KPMG had the highest growth rate. E&Y was the only firm to shrink revenues.(Diagram 3)

(Diagram  3)

PricewaterhouseCoopers PwC

- PwC revenues rose 1.5% in 2010, but not enough to remain the largest accounting firm on the planet

- PwC said after a slow start, overall performance improved consistently over the course of the fiscal year





- Deloitte said business volume increased from the prior year, while rates remained constrained by the challenging economic conditions

 - The Asia Pacific region grew 8.5% in US dollar terms and was the fastest-growing region for the sixth consecutive year 

 - And this remarkable performance helped Deloitte to beat PwC and become the largest Big Four firm in the world.

Ernst & Young

- Ernst & Young was the only firm whose revenues decreased from 2009 to 2010 

- Ernst & Young’s revenues rebounded in the second half of 2010, increasing 5.3% in US dollar terms 

- Ernst & Young made a key change to their reporting of revenues in 2009, showing combined, not consolidated revenues 

- Under the prior consolidation method in 2008, Ernst & Young’s global revenues were $24.5 billion which were revised down to $23.0 billion under the new combined method of reporting 


- KPMG’s revenue decreased the most in 2008 to 2009. And it reported the highest growth from 2009 to 2010

- KPMG’s fiscal year end is September 2010, and was aided by some additional months of global growth

- KPMG was the only firm to report positive percentage growth in all three - Americas, Europe and Asia regions



- The audit service line, the largest in all firms, accounts for almost 47% of total revenues, but this proportion is steadily dropping across the years 


- The tax service line, forms about a quarter of the Big Four firm revenue and generally holding this percentage level across the years 


- Advisory services have increased their share of revenues. In 2004, they had 22% of total revenues and this had sharply increased to 29% in 2010



- The Big Four firms cumulatively employ more than 610,000 staff all over the world 

 - In 2010, we estimate there were only about 34,000 partners in all the Big Four firms, overseeing a steep pyramid of about 460,000 professionals 


- 2010 marked a return to moderate growth, and positive global macroeconomic momentum at this time is favorable for Big Four firms

- The second half of fiscal 2010 is already producing better growth. All firms have already indicated strong improvements through the latter half of FY2010

- For 2011, we foresee much better revenue growth for all the four firms, likely in the 4% to 7% range 

- For 2011 and beyond, we will likely see a return back to solid revenue growth, though it is debatable whether a string of double-digit growth over multiple years will be seen for the next few years 

- 2011 will also be an interesting year to watch for any changes in Big Four rankings: whether PwC will be able to rebound ahead of Deloitte, and whether the gap between E&Y and KPMG narrows further.


(Extract from The 2010 Big Firm Performance Analysis" by