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Best Big 4 Audit Firms - What Are The Differences?

Tim Williams's Profile

Best Big 4 Accounting FirmsI am being asked to "shop for" an audit firm that can handle the growth we plan  to experience. What are the main differences between the big four accounting firms? Are any of them better for technology companies? Or does anyone know of  a regional firm that does well with technology comapnies


Jeff Taylor
Title: CFO
Company: Communications Co.
(CFO, Communications Co.) |

Much depends on what you want. If you want a partner with the full resources of a "big 4" firm behind them, and who may be able to give you a deal on year 1 fees but will be very expensive otherwise, that's the big 4. They all are great firms, although in your case I would look for who's best placed in your market. In the SF Bay Area Deloitte and PwC are 1 and 2, although I'm not certain in which order and for what size companies. Although all 4 firms are more than able to serve you well in almost any need you may have, the top firms simply get more practice. I have worked with both of these firms in the Bay Area and have been very happy with the results.

The flip side is regional firms. The larger regionals will have great partners (many of whom are refugees from the big 4 that wanted to actually have a life - not a bad thing at all) and will offer you a higher level of professional for your money in general, although they can't as easily afford to "buy" your business by discounting the first year heavily. They just don't have the scale and shadow marketing budgets to do that. But you will have readier access to your partner and will, all else being equal, get more senior attention. The only downside with these folks is that if you have really complex or global issues, they may not be as well positioned to handle them. Some great regionals locally are Mohler, Nixon and Williams and Frank Rimerman. There are certainly other great regional firms around, but those are the two I have dealt with directly.

If you are preparing for an IPO in the near future, go big. If not, you will likely save $ and have more partner time going regional. I have had great results with both paths based on CFO-ing a number of companies.

Sarah Jackson
Title: Associate Editor
Company: Proformative
(Associate Editor, Proformative) |

Proformative offers 400+ online business courses with free CPE, many on Audit.

(Agent, JKS Solutions, Inc.) |

PWC are number 1 by market share, deloitte are heavily discounting fees for market share but service level is patchy depending on partner from my experience, Mohler are a good firm in particular for 401k audits, I work for Rimerman and specialize in start up technology companies so will keep opinion on our work to myself.

Most regional firms are connected worldwide, for example I have worked for our affiliates in London and Australia.

Topic Expert
Keith Perry
Title: Director of Global Accounting
Company: Agrinos, Inc.
(Director of Global Accounting, Agrinos, Inc.) |

We started, in my last company, with one of the Big 4 firms; the experience prompted our CEO to echo my unstated opinion, that I would never work with that Big 4 firm again (or, likely any other unless I had to do so).

They "discounted" the fees, but that was only to bring them closer to the fees that the regionals bid.

The differences that really played out was that as we were a small player, we got handed off between managers at the big firms (for both tax and audit), so there was constant re-learning which ended up costing us significant hours internally and excessive bills externally. Similarly, due to the inconsistent handling, the work product was consistently sub-par.

When we shifted to a regional, the bills plummeted, prior errors were eliminated, and even the board had comments on several aspects of both service and product which were significantly improved.

For us, the lesson was clear. We did not have an imminent IPO (we were acquired, in the end), so we did not need to have a Big 4 involved. Similarly, we were not big enough to get the kind of service that a larger (say $100M+ firm) would get.

I've heard very positive things about Mohler and Frank, Rimerman. We worked with Sensiba in the end, and were very happy with their service but would certainly have considered the other two regionals as well.

Preston Kavanagh
Title: Partner
Company: The ILS Funds
(Partner, The ILS Funds) |

I love the Big 4 industry expertise. I work in insurance, and it makes a huge difference to have a firm that tracks industry issues, already understands a range of actuarial methods, can handle a systems-centric audit, et al. I love McGladrey & Pullen for other services, but for audit I head straight to PWC. Tim is asking for a technology specialist firm. Bio tech? Software of engineering? If you give more specifics you can get better answers.

You might have directors or investors with negotiating clout. I spent a few years in private equity, and we were able to get significant fee discounts through one or two key Big 4 relationships.

Challenge the common wisdom on getting audits. I'm a big believer in audits for companies using other people's money. If the enterprise is closely held by an owner-operator, you are more interested in great tax planning. Get a review or compilation - it might be all you need and will preserve a path back to audited financials if required by some future capital transaction.

Last, GAAP has gone far away from the needs of small businesses. Who was the last board member who read and understood all the footnotes? Find an audit firm that will help people understand the financials, not just audit them. That's usually a particular partner, not a firm.

Erich Stolz
Title: Partner - CFO / CEO Practice
Company: TATUM LLC - A Randstad Company
(Partner - CFO / CEO Practice, TATUM LLC - A Randstad Company) |

I have worked with the Big4 and also with some other national / regional firms. I prefer working with other than the Big4 firms - there are very good other regional and national firms for (sometimes) 50% lesser fees than the Big4. It really depends on the auditing director / manager who you like and who really can help you in various aspects you may have.

Scott Arnold
Title: CFO
Company: Under employed
(CFO , Under employed) |

I concur with the overall sentiments- determine there's a benefit to be derived from the best firms (or Final 4), i.e. an upcoming IPO or your firm plans to be active in M&A activities. For the basic accounting and tax services, a reputable Second Tier or regional firm generally provides a better value for the professional fees paid. Plus, the partners growth goals are
generally lower- less emphasis on selling you consulting service projects!

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I have worked with both Big 4 firms and regional firms. I have also “gone out to bid” for these services. The regional firms are typically lower in price and I have chosen them over the Big 4. However, if you foresee some very complicated accounting, issues, there may be reason to explore the Big 4 more deeply. I have found that the Big 4 firms will have the expertise to deal with almost any issue that arises. The regional firms can be good also, but it’s not guaranteed, you will find someone who instantly knows the answer to your questions. I have had good luck with some regionals, while at times I have found gaps in service. With regional firms, you have to speak up to get the right attention to your issues, if there is a shortfall of service

Pete DeWeese
Title: EVP & CFO
Company: Tanknology Inc.
(EVP & CFO, Tanknology Inc.) |

I item that has not been mentioned is the need check your loan documents most have a requirement that the bank approve the auditor or it states big 4. This is usually not a big deal to negotiate. I have found that as a CFO and major shareholder that the regional firms are a better option. The big item is they seem to have lower turnover in staffing so you do not have to retrain everyone every year. Their fees are much lower, accessibility is easy and in the rare occasion that we have had a issue that was outside of their expertise, they were able to pull in a partner from another firm to assist. Apparently the regional firms have an alliance they can belong to that allows them to access accounting firms in different parts of the country and with different expertise. This was also beneficial for inventory counts at regional locations, instead of spending money flying people around the country they were able to call in people from various firms to run out and observe the inventory. So not much different than the big boys but at 40% the price.

Jeff Taylor
Title: CFO
Company: Communications Co.
(CFO, Communications Co.) |

Another point in favor of Big 4, sort of echoing Pete's comment, is that some investors feel much better with your having a Big 4 firm audit. If you have VCs or PEs bankrolling your company, the moment you say "those #'s are audited by PwC (or Deloitte, etc.)", the conversation is over and you can move on to the next item. Some of these firms require that you use a brand-name firm, most don't. But they all feel better having that name brand cache. Not b/c it will add to your bottom line, but they feel it's a risk reducer.

Paul Weinberg
Title: President
Company: The CPA Exchange, Inc.
(President , The CPA Exchange, Inc. ) |

by the far the most important factor is having a Partner on your engagement that (a) understands your business (b) understands the industry in which you operate and (c) fits with the culture of your organization. Your Public Accounting firm needs to fit your culture, not vice versa. Do not settle. No firm is better than the other. They all have various aspects that are subject to various opinions.

Topic Expert
Tom Sheppard
Title: President
Company: The Sheppard Group
(President, The Sheppard Group) |

I have to echo this comment. For the long term or on-going basis you will be happiest where you have a relationship. All firms big and small have good and smart partners and those just interested in the deal. The big firms will help your image with VC, PE or an ipo and will likely have more experience for complex global issues. If those are your issues then go find the right partner at a Big4. If not, its all about the relationship. A word of warning. Cash may be king but if you take a highly discounted fee and get less access or continuity, then you may burn much more cash trying to get the job done right by the time you are finished.

Topic Expert
Shannon Mathews
Title: Controller
Company: Aldrich Services LLP
(Controller, Aldrich Services LLP) |

I agree with this one as well. Having worked for multiple accounting firms they all have their own culture for the employees as well as for the client experience. As stated above most of the regional/local firms have former Big 4 staff/partners that wanted to be able to have a life but also service the clients in a more personal manner. Your local banking contacts know these firms just as well as they know the Big 4. Also you will likely have a higher continuity in the staff/seniors who work on your projects from year to year (less turn over in the regional/local firms).

Take a look at Accounting Today's Top 100 firms list. Yes the Big 4 are there but there are plenty of others in your area as well that might fit you much more effectively.

Topic Expert
Doug Thompson
Title: Director of Revenue
Company: Castlight Health
(Director of Revenue, Castlight Health) |

We use EY and are happy with them. Same partner for last few years, though with turnover at the manager level. They do get busy with other customers some times however.
Used Mohler at a previous company and was happy with them, very responsive.

Topic Expert
Dana Price
Title: Vice President, M&A
Company: McGraw Hill Education
(Vice President, M&A, McGraw Hill Education) |

Do you have debt and does it require Big 4? I was PE backed with debt and able to go with #5 firm once I showed how much we would save in audit fees. But agree with all the comments above.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

As with all services, cost is usually the worse metric to use when deciding which CPA firm you should choose. So is the moniker of "big 4", Ivy League or NCAA.

Choose the firm based on the expertise required, the marketplace you are in, the regional overall reputation and in the final analysis, do you click with the firm.

Nancy Brown
Title: Tax and Treasury Controller
Company: Schindler Elevator Corp.
(Tax and Treasury Controller, Schindler Elevator Corp.) |

We use E&Y for financial audits and Deloitte for Transfer Pricing/Tax Credits. We use smaller firms for state issues. In our case, being Swiss owned, many customer's here in the US want to see audited financials as well as some vendors which is why we do stand alone US financials.

It depends on your needs. In my past I worked for a large global company and we used PwC for tax advise. They are very good, but due to their cost, wouldn't suggest them for small to medium companies.

Pamela Hedblad
Title: Principal
Company: Abbott, Stringham & Lynch
LinkedIn Profile
(Principal, Abbott, Stringham & Lynch) |

I have a buddy who is a controller at a high tech (software) start-up. They have been through Deloitte and now use PWC. Both have been very unsatisfactory when it comes to service and timing. There is a lot of retraining of staff every year, and it takes a year to get the audit report finalized. They definitely fall to the bottom priority when it comes to service.
I am with a local firm, Abbott, Stringham & Lynch. We have a technology niche group and have a lot of technology clients in various industries. We have a partner with international tax experience, and we belong to the accounting association PKF International, which we rely on when we need expertise in another country.
Obviously I'm biased, but I can tell you we give clients way better service than a small company would get from a Big 4.

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

Pamela - There is a CPA firm that has branded themselves as, "The Unique Alternative to the Big Four" Maybe your buddy could search the web for this "unique alternative" and see if this particular firm may be able to help them. The more firms continue to grow, I think there is a likelihood that the industry will get back to the Big 8 days. All that will change is who the "Big" firms are classified as.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

@ Chris:

So, are you saying that Arthur Andersen will be resurrected? ;-)

At my first government job, Andersen consultants were engaged for a $multi-million IT project. The project spanned several years and the consultants literally moved into our offices. They acted like and, were treated as, agency employees. Which was a major mistake IMHO.

Just as the Touche Ross auditors at my previous employer had, a $70M private entity, the AA consultants seemed to look down their noses at us plebian finance department staffers at the agency. They were not quite as bad as the Touche Ross auditors. But, they exhibited an air of superiority none-the-less that only reconfirmed my choice not to go the auditor to CPA to finance officer route with my career early on.

We had several staff members that were Big 8 refugees at the governmental agency I mentioned and they were none too enamored of the conflict of interest they saw in the Big 8 firms doing consulting work as well as claiming to be independent auditors.

We would regularly end up in this friendly but sometimes intense debates between our accounting staff and the AA consulting team, about this conflict of interest issue. Often, over lunch.

The agency staff saw it as eliminating the sacrosanct independence of the auditor.

The AA consultants vehemently argued that, as they were a separate division, all potential conflicts were eliminated.

Several years after I left that agency, the Enron scandal unfolded and AA fell off the face of the earth.

I can't tell you how much I wished then that I still had the contact information for those AA consultants so that I might give them shout out and ask, "How's that no conflict of interest thing working for you now?"


That combined with user experience with auditors of all stripes, large, medium and small, has taught me to be wary of auditors in general. No matter their "credentials". They are necessary and can provide a valuable service. But they, like every other vendor one purchases a product or service from, also have a great deal of self interest that may not be congruent with yours. Thus, their engagements must be carefully scoped and monitored and reviewed by the agency/customer.

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