If you’ve ever looked at Accounting companies before, odds are you’ve heard the phrase Big 4 thrown around, and maybe wondering what exactly does that mean? The term is actually used to refer to the four largest accounting and auditing firms currently out there: PricewaterhouseCoopers, Deloitte Touche Thmatsu, Ernst & Young, and KPMG.
These four, along with the next two largest, Grant Thornton and BDO, perform the audits of nearly 97% of publicly traded companies. They also perform virtually every type of accounting service, from tax, consulting, advising, and legal among others. Having work experience at a Big 4 company goes a long way opening up career opportunities for a lot of accountants and accounting outsourcing companies in UK.
Until the late eighties, it actually used to be known as the Big 8, and companies have dropped out or merged with others over the years. The most recent of these was Arthur Anderson, who dropped out back in 2002 after the whole Enron situation.
Difference Between Public and Private Accounting
Now, when you hear about Accounting jobs and firms, you’ve likely heard the terms Public Accounting and Private Accounting used before. I get asked a lot about what makes them different, so here it is in a nutshell: Public Accounting is going to be done by one company for another company, where Private Accounting is done for your own company. Or in other words, think of your public accountants as external and your private accountants as internal.
Public Accountants have multiple clients, and their primary function is to review their client’s accounting information to make sure it’s being presented accurately, where your private accountant is going to be your actual accountant who is doing the accounting work for your company. Sometimes it’s necessary to have a public accountant to review your books and processes for things such as loans, banks like to have an independent set of eyes make sure everything looks good. Because the public accountant does not have any personal investment in the company they are working on, they are able to provide a more objective review.