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Major_Independence_6 t1_ixzup9q wrote

Would be more useful if terminology was consistent and you show consulting services in detail for all of them. OP just takes data from a random industry and makes a simple chart without any context.

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Rollover_Hazard t1_iy08ybd wrote

Exactly lol. These companies are the biggest tax/ consultancy/ auditing firms in the world.

It turns out they all generate huge revenue from tax/ consultancy/ auditing.

Shocked pikachu

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otclogic t1_iy0mztb wrote

This chart looks fine but once you read the labels it’s less than useless.

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haqglo11 t1_iy2fo76 wrote

Not useless. Yeah, could have normalized the service names, but essentially this is saying Deloitte has a $37bn consulting business versus EY and PwC having roughly $20bn consulting business versus KPMG coming in at $13bn

Deloitte never spun consulting so they have a massive lead hence the outsized revenue

Transactions and risk advisory is typically part of consulting or advisory, as some firms call it

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IambicPentakill t1_iy0fi19 wrote

Also consistent colors. Make all the tax work yellow or whatever. Not beautiful.

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paperrug12 t1_iy0l8d3 wrote

well the colors are the company colors.

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IambicPentakill t1_iy0v0sd wrote

Obviously. Which makes it very challenging to compare and therefore not a good presentation of data.

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orhan94 t1_iy2zt5s wrote

And since the colors aren't consistent for the different services, you have to read the labels for each one to compare them.

Meaning this graphic is less useful when comparing the four than a small paragraph of text with the same information. Which defeats the purpose of it being a visual representation of the data in question.

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Good_old_Marshmallow t1_iy5522i wrote

The colors are the company colors and I can’t understate how strong their branding is. If you go to school for accounting they bombard you with their recruiting/marketing constantly. To the point where they explicitly will sponsor professors at some schools.

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civil_beast t1_iy1ennu wrote

Yes - intrigued to learn the distinction b/n advisory services and consulting.. I’ll hang up And listen

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Sparkatarka t1_iy1l1ss wrote

The difference is basically branding and how the companies split the different offerings. Effectively they can all he called consulting or advisory. EY specifically rebranded from advisory to consulting a few years back without changing business models at all.

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gyang333 t1_iy2llgf wrote

Deloitte uses both Consulting and Advisory though.

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gyang333 t1_iy2ljzm wrote

Hard to do consistent terminology as the firms have different service line categorizations. For example, EY and KPMG terms Risk Advisory as "Consulting" while PwC terms Risk as Assurance, and Deloitte groups it in its own category. That's just one example. I think Financial Advisory is the same kind of inconsistency amongst the 4.

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Major_Independence_6 t1_iy2mflx wrote

Assurance is audit.

Advisory is consulting.

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gyang333 t1_iy2mt78 wrote

I know that. But look at the Deloitte breakouts. There's Risk Advisory, Financial Advisory, and also Consulting. Deloitte breaks it out differently than the other 3 do. Financial Advisory, is known as FAAS at EY - Financial Accounting Advisory Services but it's a joint venture between Assurance and Consulting and the revenue is split between the two service lines at EY, while at D it's its own category.

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Major_Independence_6 t1_iy3r3b8 wrote

I think the bigger takeaway is that this chart is useless because there’s no real world application for any of the data. Revenue doesn’t tell a story. We all know that 4 firms have an oligopoly, collude on billing rates, don’t need to compete with one another, have barriers to entry, and the government protects them.

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uberseed t1_iy3t47o wrote

You have no idea what you're talking about. Anyone can create their own CPA firm and there are tons of those.

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Major_Independence_6 t1_iy3u8ck wrote

Oh right, I forgot about all those small firms that provide consulting, tax, and audit services to public companies, and sit on the boards of public companies. 🙄

Oligopolies are indefensible. I find it odd that anyone would argue that they don’t exist and/or defend them.

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uberseed t1_iy3wivc wrote

Yes you actually forgot about them. RSM and Grant Thornton and many others have public clients.

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Major_Independence_6 t1_iy4w545 wrote

To say that middle market firms compete with the big 4 for public company clients is laughable.

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LordFaquaad t1_iy4rlp4 wrote

Lol collude on billing rates. These firms absolutely compete with one another. It's some of the most competitive behavior I've seen in any industry.

The government does not protect them. Please read up on the PCAOB. No one is forcing their clients to work with them. Clients can always choose to change firms. Idk what you're talking about.

Also they're not really an ogilopolu since firms like GT and RSM also have large assurance practices

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Major_Independence_6 t1_iy593bc wrote

I’ve been on both sides for many years. Billing rates are basically the same across the big 4 and across middle market (RSM, GT, BDO, etc.). In my experience, billing rates were very rarely the deciding factor in winning a new audit client or selecting a firm for audit, tax or consulting.

RSM is the 5th largest firm worldwide, and is not even close to the top 4. The top is controlled by the 4 firms listed here, with little to no competition from other smaller firms.

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S0mething_3ls3 t1_iy2hn0u wrote

These are probably their department names within the company, and Deloitte and EY probably just have enough consulting business to have their own department.

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