Accountancy

Accountancy (British English) or accounting (American English) is the measurement, disclosure or provision of assurance about information that helps managers and other decision makers make resource allocation decisions. Financial accounting is one branch of accounting and historically has involved processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated. Auditing, a related but separate discipline, is the process whereby an independent auditor examines an organization's financial statements in order to express an opinion -- that conveys reasonable but not absolute assurance -- as to the fairness and adherence to generally accepted accounting principles, in all material respects.

The "Big Four" accountancy firms

The "Big Four auditors" are the largest multinational accountancy firms.

Related Topics:
Big Four auditor - Multinational

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• PricewaterhouseCoopers
• Deloitte Touche Tohmatsu
• Ernst & Young
• KPMG

The Big 4 accountancy firms can all trace their history back to firms in Europe, from which they have descended through a long line of mergers. Many of the originating firms were from the United Kingdom. As British trade interests expanded, correspondent firms were established throughout the world by the organisations. These firms are associations of the partnerships in each country rather than having the classical structure of holding company and subsidiaries, but each has an international 'umbrella' organisation for co-ordination. However, due to the dominant size of the United States' economy, the offices of the Big 4 accountancy firms based in the United States have always generated more revenue than the rest of the Big 4 accountancy firms' offices in the world combined.

Related Topics:
United Kingdom - United States' economy

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Before the Enron and other scandals, there were five large firms and were called the Big Five. Since Arthur Andersen's assurance practice split, with a plurality joining KPMG in the US and Deloitte & Touche outside of the US, Arthur Andersen left from the group. Previous to this there were also groupings referred to as the "Big Six" and the "Big Eight".

Related Topics:
Enron - Arthur Andersen - Assurance

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Enron turned out to be only the first of a series of Accounting scandals that enveloped the accounting industry in 2002.

Related Topics:
Accounting scandals - 2002

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This is likely to have far-reaching consequences for the U.S. accounting industry. Application of International Accounting Standards originating in International Accounting Standards Board headquartered in London and bearing more resemblance to UK than current US practices is often advocated by those who note the relative stability of the U.K. accounting system (which reformed itself after scandals in the late 1980s and early 1990s). Accounting reform of a far more comprehensive sort is advocated by those who see issues with capitalism or economics, and seek ecological or social accountability.

Related Topics:
International Accounting Standards - International Accounting Standards Board - London - US practices - 1980s - 1990s - Accounting reform - Capitalism - Economics

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