The history of Deloitte, PwC, EY and KPMG — from the origins of modern auditing and the rise of the Big Eight to the mergers, scandals and regulatory upheavals that created today’s Big Four.
Deloitte, PwC, EY and KPMG are the surviving products of more than a century of mergers, international expansion, regulatory change and upheaval within the accounting profession.
Their history runs alongside the development of the modern corporation itself.
As industrial companies grew during the nineteenth and early twentieth centuries, investors needed independent accountants to verify the increasingly complex financial information being produced by the businesses in which they invested. British accounting firms followed capital across the Atlantic, American firms emerged alongside them, and auditing gradually developed from a largely private service into an important component of the public financial system.
By the middle of the twentieth century, eight firms had risen to dominate the audit of America’s largest corporations. They became known as the Big Eight.
By 2002, there were four.
This Big4News history series traces how that happened — and how the economic incentives, regulatory responsibilities and commercial pressures that developed along the way continue to shape Deloitte, PwC, EY and KPMG today.
The rise of the Big Eight
The story begins long before anyone spoke about the Big Four.
Industrialisation, the growth of public capital markets and a succession of enormous corporate combinations created demand for accountants capable of examining increasingly large and complex businesses.
Firms including Price Waterhouse, Deloitte, Haskins & Sells, Arthur Andersen, Arthur Young, Peat Marwick, Ernst & Ernst and Touche Ross expanded alongside their corporate clients.
The securities legislation introduced after the Wall Street Crash gave the profession an even more important role. Auditing increasingly became part of the institutional architecture supporting confidence in public companies and capital markets.
By the middle of the twentieth century, eight major accounting firms had emerged at the top of the profession.
Read: The Rise of the Big Eight Audit Firms →
The Rise of the Big Eight Audit Firms
Long before Deloitte, PwC, EY and KPMG became the Big Four, eight accounting firms dominated the audit of the world’s largest companies. Their rise was closely intertwined with industrialisation, the growth of public capital markets and the development of the modern corporation.
From the Big Eight to the Big Four
The dominance of the Big Eight did not last.
By the 1970s and 1980s, the economics of the accounting profession were changing. Audit fees were under pressure. Litigation exposure was increasing. Multinational companies required increasingly sophisticated international networks. At the same time, consulting and advisory services were becoming an important source of growth.
Scale became increasingly valuable.
Peat Marwick’s international combination helped create KPMG in 1987. Two enormous mergers in 1989 produced Ernst & Young and Deloitte & Touche, reducing the Big Eight to the Big Six.
Price Waterhouse and Coopers & Lybrand then combined in 1998 to create PricewaterhouseCoopers.
Eight had become five.
Read: How the Big Eight Audit Firms Became the Big Four →
How the Big Eight Audit Firms Became the Big Four
The contraction from the Big Eight to the Big Four was not one event. It was the result of mounting commercial pressures, globalisation, a succession of enormous accounting-firm mergers and, finally, the implosion of one of the most prestigious names in the profession.
Arthur Andersen, Enron and the birth of the Big Four
The final contraction was different.
Arthur Andersen was not absorbed by another giant accounting firm. It collapsed.
Once one of the most prestigious accounting firms in the world, Andersen became engulfed in the fallout from the collapse of Enron, whose financial statements it had audited for 16 years.
The relationship between auditor and client had become extraordinarily close. Andersen earned substantial audit and non-audit fees from Enron, former Andersen personnel occupied senior positions at the company, and concerns about Enron’s accounting had circulated within the firm before the company’s collapse.
Then came the destruction of Enron-related documents as regulatory scrutiny intensified.
Arthur Andersen was convicted of obstruction of justice in June 2002 and subsequently ceased practising before the SEC. The US Supreme Court unanimously overturned the conviction in 2005 because of defective jury instructions, but the legal victory came far too late to resurrect the firm.
Its clients and personnel had already dispersed.
The Big Five had become the Big Four.
Read: Arthur Andersen and Enron: How a Big Five Accounting Firm Collapsed →
Arthur Andersen and Enron: How a Big Five Accounting Firm Collapsed
In 2001, Arthur Andersen was the fourth-largest public accounting firm in the United States, with global net revenues of more than $9 billion. It audited or provided attest services to around 2,400 US public companies, including some of the largest corporations in the world. Little more than a year later, it had effectively disappeared from public-compa…
The Big Four today
The four firms that survived — Deloitte, PwC, EY and KPMG — now sit at the centre of a professional-services industry very different from the accounting profession from which they emerged.
They are global networks spanning audit, tax, consulting, technology, deals and numerous specialist advisory businesses. Yet they retain a distinctive public-interest responsibility because of their role in auditing many of the world’s most important companies.
That tension between commercial enterprise and public gatekeeper runs through much of Big Four history.
It can be seen in the expansion of accountants into advisory work in the early twentieth century; the rise of consulting businesses decades later; the merger wave that produced today’s firms; the collapse of Arthur Andersen; and continuing debates about audit independence, market concentration and the regulation of the profession.
This history series will continue to trace those developments, examining the firms, people, scandals, mergers and regulatory changes that created the modern Big Four.
Audit regulation and oversight
The history of the Big Four cannot be separated from the history of audit regulation. The securities laws enacted after the Wall Street Crash established the SEC, while the accounting scandals surrounding Enron and WorldCom ultimately produced a new system of independent audit oversight through the Sarbanes-Oxley Act and the creation of the PCAOB.
That regulatory framework continues to evolve.
Read: Timeline: How the SEC and PCAOB Are Quietly Redrawing US Audit Oversight →
Timeline: How the SEC and PCAOB are quietly redrawing US audit oversight
This timeline is a live document and continues to be updated as new developments emerge. Last update: 20 September 2026
Explore Big Four history
The Rise of the Big Eight Audit Firms
How industrialisation, capital markets, regulation and the growth of corporate America created the accounting firms that came to dominate twentieth-century auditing.
How the Big Eight Audit Firms Became the Big Four
How commercial pressure, globalisation, consulting growth and a series of enormous mergers transformed eight dominant accounting firms into five — before the collapse of Arthur Andersen left four.
Arthur Andersen and Enron: How a Big Five Accounting Firm Collapsed
How one of the world’s largest accounting firms became entangled with Enron, destroyed audit documents during the ensuing crisis and disappeared from public-company auditing.
How the SEC and PCAOB Are Quietly Redrawing US Audit Oversight
Tracing how US audit oversight evolved from the creation of the SEC after the 1929 crash to the establishment of the PCAOB after Enron and WorldCom, and the regulatory changes shaping the profession today.
Big Four History is a growing Big4News resource. New articles will be added as the series develops.