Australia’s Big Four accounting firms—KPMG, PwC, Deloitte, and Ernst & Young—are facing challenges that smaller consulting firms are now exploiting. These upstarts are luring away seasoned partners, securing government contracts, and entering sectors once controlled by the industry’s largest players.
Amid ongoing challenges for KPMG, which reportedly plans to cut 400 more jobs in Australia, an opportunity arises. A string of scandals and controversies has undermined trust in the country’s leading accounting and consulting firms.
Setbacks for the Big Four
KPMG has agreed to halt new Commonwealth contracts until February 2027 due to allegations of misusing confidential client data. Several state governments have also imposed restrictions, mirroring actions taken against PwC after its 2023 tax confidentiality scandal.
Smaller consulting firms are gaining ground, with Terence Jeyaretnam AM, a former EY partner and executive director at boutique consultancy Foresight, saying the issues surrounding PwC and KPMG had created “quite a significant opportunity” for smaller consultancies like his.
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Expanding into New Markets
Foresight, a firm with about 25 employees, is venturing into areas typically dominated by the Big Four. It recently hired former Deloitte executive Jordan Petrie to head its government consulting division and appointed ex-KPMG partner Meg Brodie as a director.
Government contracts currently account for about 10% of Foresight’s revenue, but Jeyaretnam expects that figure to reach 35% within a few years. The company is already on a government procurement panel and is going through the process of joining others to compete for larger tenders.
Big Four Talent Exodus
The changing situation is also creating opportunities for consulting firms outside the Big Four to win private-sector clients and expand into markets traditionally served by the industry’s largest players. Mark Dewar, Australian practice leader at FTI Consulting, said the firm grew its Australian workforce from around 380 to 550 employees in just the last 18 months, an increase of almost 45%.
Dewar attributed the decline in confidence in the Big Four to controversies involving PwC and KPMG, as well as Deloitte’s use of AI in a government report with fabricated references. He noted that even Big Four professionals uninvolved in these issues suffered reputational damage.
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FTI has moved into the vacuum left by the Big Four, expanding into new sectors and recruiting heavily from the major accounting firms. Its healthcare consulting practice has grown to 75 employees over the past 18 months, while its new mining advisory division has recruited six former Big Four partners, including former global mining leaders from Deloitte, PwC, and EY.
Size Matters
Dewar anticipates that other independent consultancies will seize similar opportunities as larger corporations increasingly reconsider their ties with the Big Four. He observed that independents are now claiming a larger market share, stating, ‘There’s not the big monopolies that the Big Four previously enjoyed.’
Despite significant growth over the past 18 months, Dewar emphasized that FTI intends to remain relatively small and agile, avoiding the bureaucracy and conflicts of interest associated with the Big Four’s scale. ‘We are never going to be a Big Four,’ he declared.
FTI can maintain close relationships with staff and clients while taking advantage of opportunities in the market by staying smaller, according to Dewar. He said, “It’s exciting, and it’s there for the taking,” and this approach allows FTI to be more agile and responsive to client needs.
