The website Big4.com likes to put out an analysis of the Big 4 firms' revenues every year and we're pretty grateful because we sure as hell don't want to do it.
That said, it's largely just a press release for all the firms to remind everyone how much they're crushing it. And although Big4.com "believes in these numbers and analysis" they also admit that the "source of figures for this analysis are publicly available financial statements and/or press releases issued by Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers PwC LLP on their website or on the internet." So there's that.
Anyway, there's plenty of interesting information in the report so take a flip for yourself if you're bored. We'll highlight a few things we found interesting.
- The combined $110 billion in revenues is a record.
- PwC and Deloitte are only separated by $200 million in revenues, which is roughly all the U.S. revenues for Reznick Group had in FY11.
- Ernst & Young and KPMG are separated by $1.4 billion in revenues, which is approximately McGladrey's U.S. revenues for FY11.
- Deloitte's audit business grew 6% in FY12, despite questions about the quality of its audits.
- KPMG was dragged down by its Europe business.
- In the analysis of E&Y, the report sings the praises of outgoing global CEO Jim Turley for more than doubling the firm's revenues since he took over in 2001, doubling headcount, and "establish[ing] itself as the most globally integrated organization in the profession in mindset, actions and structure," whatever that means.
But enough with the words already; how about some charts?!
Here's what audit revenue as a percentage of total revenue looks like:
And here's advisory revenue as a percentage of total revenue:
Two clear trends here, obviously. Advisory is going gangbusters while audit loses pace year after year although it remains the largest service line (just barely in Deloitte's case). What's also interesting — but not necessarily surprising — is that Deloitte's ratio of advisory revenue to total revenue is by far the greatest. It just so happens that the Green Dot also has the lowest ratio of audit revenues to total revenue.
Finally, here's the overall trend of growth for all three service lines:
There's really, truly nothing interesting to say about the tax business for these firms. It's boring. It's steady. They probably like it that way. Maybe what I'm saying is, "WE COULD REALLY USE ANOTHER TAX SHELTER SCANDAL, YOU GUYS."
So that's probably enough information to tide you over for a while. However, if you prefer your Big 4 revenue analysis delievered by spoken word, then this short video should satisfy.
They sure know their audience, don't they?
THE 2012 BIG FOUR FIRMS PERFORMANCE ANALYSIS [Big 4]