It's a study made on BIG FOUR Auditing Firms and the detailed report is given here.

1. Sai Saranya Iyer R
Nandita K
Hayagreevan GP
VIT BUSINESS SCHOOL
Market Analysis of BIG 4
A group of Auditing & consulting Firms

2. Contents
VIT Business School ..................................................................................................................................... 3
Introduction to BIG FOUR ............................................................................................................................. 4
Market Share Analysis................................................................................................................................... 4
Labor-capital Ratio ........................................................................................................................................ 5
Reported Fee Income .................................................................................................................................... 7
Company Analysis ......................................................................................................................................... 8
Conclusion ..................................................................................................................................................... 9

3. VIT Business School
VIT University was established in 1984 by well-known educationalist and former parliamentarian, Dr. G. Viswanathan, Founder and Chancellor. Dr. V. Raju, Former Professor of State University of New York, USA, currently the Vice Chancellor, Dr. Anand A. Samuel, Pro-Vice Chancellor. Chennai Campus is in Vandalur-Kelambakkam Road.VIT University has more than 17 Bachelor’s and 32 Masters’ programmes, 29000 (including 1000 foreign students from 44 countries) and 4000 faculty members Accreditation:  The National Assessment and Accreditation Council (NAAC) of the University Grants Commission (UGC) has accredited the university with a 'A'.  The Institution of Engineering and Technology (IET), and the Energy Institute, UK have audited the teaching-learning processes at VIT and accredited the programmes in 2004, with the highest validity of five years  Programmes at VIT are accredited by the Institution of Engineers, India (IEI).  The Accreditation Board for Engineering and Technology (ABET) of the USA accredited the Civil, Mech, CSE, biomedical, ECE, EEE programmes. VIT Business School, under the aegis VIT University has created a niche for itself as an institution promoting excellence in management education and research with Dr. M J Xavier as its Executive Director.
Sincere Thanks to Dr. James Daniel Paul for having given us this wonderful opportunity to do a complete study on market for the companies of our own interest.

4. Introduction to BIG FOUR
Big Four are the four largest integrated international professional services network. The Four major big firms namely, Deloitte & Touche, KPMG, Ernst & Young, PWC have integrated and entered into an agreement to share a common brand name, quality standards etc. They handle vast majority of Audit for publicly Traded companies and also for the private companies and thereby creating oligopoly market in Auditing Big Firms.
Services offered
 Audit
 Assurance
 Tax
 Consulting
 Advisory
 Corporate Finance
 Legal services
Market Share Analysis
Market share is the percentage of a market accounted for by a specific entity. Marketers need to be able to translate and incorporate sales targets into market share because this will demonstrate whether forecasts are to be attained by growing with the market or by capturing share from competitors. Market share is closely monitored for signs of change in the competitive landscape, and it frequently drives strategic or tactical action. Increasing Market share is one of the most important objectives of a business houses.
Market share is said to be a key indicator of market competitiveness.

5. The following Pie chart depicts the market share of Big Four companies and the other competitors which is made based on the sales Turnover and the same may be presented in the Tabular form also.
From this diagram it’s clearly understood that the majority of market share holding of 26% is vested with the Deloitte and the Pwc companies while Ernst & young holds 21% and KPMG holds 19% and others remaining percentage of share in the market contributing to 100% in total.
Labor-capital Ratio
Labor to capital Ratio brings us the relationship between Labor in the organization and the capital invested by the proprietor to evaluate the efficiency of the firm.
It may be obtained by using the following formula and that is
Labor-capital ratio = Capital/ No of workers.
Capital employed must be taken into consideration only the paid up share capital of the company and not the authorized capital. No of Employees for companies all over the world is found out and divided with Total capital.
26%
26%
21%
19%
3%
5%
0%
Turnover
Delloitte
PwC
EY
KPMG
Grant Thornton
BDO
RSM Tenon
Smith & Williamson

6. Total of Man power:
• Deloitte ------------------ 2,00,000
• PWC ----------------- 1,84,000
• Ernst & Young ---------- 1,75,000
• KPMG -------------------- 1,55,000
The above bar graph denotes the relationship between Capital invested and Labor hired by the Employer. In this graph, X axis represents the Name of the company while Y axis represents the percentage of Labor-capital Ratio which has been calculated by using above said formula.
As for as any organization concerned irrespective of the size of business, it’s main factors of production would be Man power. It has a highest & vital role among the four factors of production.
Delloitte
PwC
EY
KPMG
GrantThornton
BDO
RSMTenon
Labour capital ratio
0.6172
0.5607
0.7364
0.641
0.8444
0.1782
0.8
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9Professionals capital ratio
Labour capital ratio

7. Reported Fee Income
The BIG FOUR companies are the Auditing and consulting firms and have a major revenue in the form of Fees. Revenue means profit or money making by the business for their products and services. Their Revenues were obtained and compared.
The above Bar Graph shows us the Revenue of BIG FOUR Auditing firms for the year ending 2013. It’s clearly known that Deloitte company is at the Top earning a Revenue of $32.4 Billion. PWC makes a revenue of $32.1 Billion, Ernst & Young makes a revenue of $23.42 Billion and finally KPMG makes a revenue of $25.38 Billion.
According to survey from International Accounting Bulletin, Deloitte replaces PWC as biggest global firm by revenue.

8. Company Analysis
Fundamental analysis seeks to determine the intrinsic value of a company's stock. But since qualitative factors, by definition, represent aspects of a company's business that are difficult or impossible to quantify, incorporating that kind of information into a pricing evaluation can be quite difficult.
Another business consideration for investors is competitive advantage. A company's long-term success is driven largely by its ability to maintain a competitive advantage - and keep it. competitive advantage gained by:  A unique competitive position  Clear tradeoffs and choices vis-à-vis competitors  Activities tailored to the company's strategy  A high degree of fit across activities (it is the activity system, not the parts, that ensure sustainability)  A high degree of operational effectiveness

9. Conclusion
Investigation of the BIG4 consolidation’s impact on Auditor market share equity. & also investigate the commonality of the Auditors of the largest 4companies in each market
The Big 4 consolidation raises concerns about the level of audit market competition.
The consolidation also corresponded to the creation of the Public Company.
Accounting Oversight Board the strengthening of independence rules that limit the
Services an audit firm can provide to an audit client.
The Big 4 consolidation should increase Concentration in the audit market, but the impact on market share equality is less clear.
The Big 4 consolidation can produce different equality of market share outcomes.

10. Reference:
Dr. P. James Daniel Paul,
Professor,
VITBS, Chennai,
Jamesdanielpaul.p@vit.ac.in
Telephone: +91 44 3993 1040
Mobile : +91 98402 94590