Redistributive Market Changes that May Arise if a Big Four Accounting Firm Fails

Project Abstract

This work investigates the effects of the hypothetical failure of a Big Four accounting firm on the current public accounting market, with an emphasis on how audit and accounting services would be redistributed among the remaining firms. Using graph theoretic techniques and historical data based upon the failure of Arthur Andersen in 2002, three models of a post-failure redistribution of audit and accounting services are considered. The first model assumes that no corporate organizational changes occur post-failure besides the redistribution of the failed firm’s employees and clients. The second and third models assume that several non-Big Four firms merge together to create “the Merger,” which is the approximate size of the failed firm. The results indicate that at least two of the remaining “Big” firms switch ranks in terms of global revenues, and the Merger becomes as comparatively efficient when measured by average revenues generated per employee.

Funding Type

Research Grant

Academic College

Arthur J. Bauernfeind College of Business




M.S. in Mathematics




Dr. Amanda Grossman

Academic College

Arthur J. Bauernfeind College of Business

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