Like most of the rest of the economy, the Big 4 accounting firms hit the skids in 2009, suffering an overall revenue decline in the face of difficult markets, slow global economic activity, cost-conscious customers, and stagnant merger and acquisition activity.

A social network of Big 4 professionals and alumni assembled publicly available data to assess the economic damage to the world’s four largest accounting firms, Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers. They found combined revenue for the four firms fell 7 percent from 2008 to 2009. In terms of U.S. dollars, Deloitte slipped 5 percent, E&Y and PwC 7 percent each, and KPMG by 11 percent.

PricewaterhouseCoopers retained its position as the largest of the Big 4 firms with revenues of $26.2 billion, but Deloitte was close behind in 2009 at $26.1 billion. Ernst & Young recorded $21.4 billion and KPMG followed at $20.1 billion. The overall revenue decline followed six years of rapid growth for the four firms, fueled by a global financial boom in the middle of the decade, assertive penetration into emerging economies, and the absorption of business from the collapse of Arthur Andersen.

Audit services remain the largest category of services among the Big 4, and they account for nearly 50 percent of revenues across the firms. Audit work grew substantially from 2005 to 2007, but slowed considerably in 2008 and 2009 for the Big 4, with combined revenue shrinking 6 percent in the last two years as fees came under pressure. Tax services declined 7 percent while general advisory services declined 9 percent.

Despite overall revenue declines, the Big 4 continued adding to their headcounts, albeit at a much slower rate in 2009, according to the analysis. The network report says the Big 4 cumulatively employ more than 600,000 professionals around the world, rising steadily from 435,000 in 2004. In 2009, headcount grew by some 10,000 across the Big 4, rising only 2 percent in the year compared with growth rates of 6 percent to 10 percent in the four years prior.

Given more recent overall improvements in equity values and market conditions, the network anticipates a return to revenue growth in 2010 for the Big 4, although the network remains cautious about whether revenue will grow as quickly in the coming few years as it did over the past several years.