Summary: Evolution from the Big Eight to the Big Four Audit Firms
The "Big Four" audit firms refer to the four largest international accounting and professional services
networks: Deloitte, PwC (PricewaterhouseCoopers), EY (Ernst & Young), and KPMG. These firms
evolved from what was originally known as the "Big Eight" in the 1980s, comprising:
1. Arthur Andersen
2. Arthur Young
3. Coopers & Lybrand
4. Deloitte Haskins & Sells
5. Ernst & Whinney
6. Peat Marwick Mitchell
7. Price Waterhouse
8. Touche Ross
Key Mergers and Events:
1. 1989 Mergers:
o Ernst & Whinney merged with Arthur Young to form Ernst & Young (EY).
o Deloitte Haskins & Sells merged with Touche Ross to form Deloitte & Touche (now
Deloitte).
2. 1998 Merger:
o Price Waterhouse merged with Coopers & Lybrand to create PricewaterhouseCoopers
(PwC).
3. 2002 Collapse:
o Arthur Andersen, one of the original Big Eight, collapsed following its involvement in
the Enron scandal, leaving only four major firms.
This series of mergers and the collapse of Arthur Andersen reduced the number from the Big Eight to
the Big Four we know today.
How the Big Eight Became the Big Four
The Big Eight firms originally referred to the largest international accounting firms, each offering a
range of audit, tax, and consulting services. Over the years, a series of mergers reduced these eight
firms to the current Big Four:
1. Deloitte Haskins & Sells and Touche Ross merged in 1989 to form Deloitte & Touche.
2. Price Waterhouse merged with Coopers & Lybrand in 1998, creating PricewaterhouseCoopers
(PwC).
3. Ernst & Whinney and Arthur Young merged in 1989 to form Ernst & Young (EY).
4. Peat Marwick International and Klynveld Main Goerdeler (KMG) merged in 1987, forming
KPMG.
The collapse of Arthur Andersen after the Enron scandal in 2002 further consolidated the industry,
reducing the Big Five to the Big Four that dominate the global accounting and auditing landscape
today.
Sectors Audited by the Big Four in Nigeria (2023)
The Big Four firms in Nigeria continue to audit a significant portion of the largest companies listed on
the Nigerian Exchange Group (NGX). Here is a summary of sectors and notable companies audited by
these firms:
1. PwC (PricewaterhouseCoopers):
o Banking: Access Bank, FBN Holdings, GT Bank, UBA
o Consumer Goods: Guinness Nigeria, Dangote Sugar
o Cement: BUA Cement, Dangote Cement
2. KPMG:
o Banking: Zenith Bank, FCMB, Stanbic IBTC, Union Bank
o Cement: Lafarge
o Consumer Goods: Flour Mills of Nigeria, Unilever
o Oil and Gas: TotalEnergies Marketing Nigeria
3. EY (Ernst & Young):
o Banking: Fidelity Bank, Sterling Bank
o Oil and Gas: Seplat Petroleum
o Others: Transcorp, Custodian Investment
4. Deloitte:
o Cement: Dangote Cement
o Brewery: Nigerian Breweries
o Consumer Goods: Nestle Nigeria
o Agriculture: Presco
These firms dominate the audit industry in Nigeria, contributing significantly to financial transparency
and compliance within various sectors.
Sources:
Nairametrics (2023). Big 4 earn N7.53 billion auditing Nigeria’s biggest companies.
Big4AccountingFirms.org (2024). Who Were The Big 5 Accounting Firms?
