Arthur Andersen (defunct) vs Deloitte

Arthur Edward Andersen founded his accounting practice in Chicago in 1913 at age 28. In its early years, the firm famously refused to certify the accounts of a railroad client that was misrepresenting its revenues. The client threatened to take its business elsewhere. Andersen reportedly told the client: "There is not enough money in the city of Chicago to make me do that." The client left. The story was repeated in the firm's training programmes for decades — as a founding myth that would make the firm's eventual destruction all the more ironic.

Through the mid-twentieth century, Arthur Andersen grew to become the most prestigious accounting firm in the United States. The firm was known for its culture of uniformity — partners across the country were expected to dress the same, speak the same, and apply the same standards. Andersen recruited from the top universities and invested heavily in training. At its peak, the firm had 85,000 employees in 84 countries. The "Arthur Andersen way" was a benchmark that other firms aspired to match.

Arthur Andersen's consulting division had grown so large and profitable that it dwarfed the audit practice. The consultants resented subsidising the auditors. In 2000, after years of internal warfare, the consulting division was spun off as Accenture — which would go on to become one of the most valuable professional services companies in the world. Arthur Andersen retained the audit business but had lost its most profitable revenue stream, leaving the firm financially dependent on a single catastrophic client failure away from disaster.

Arthur Andersen had been Enron's auditor since 1985 and earned $52 million from the company in 2000 alone — split roughly equally between audit and consulting fees. When Enron's accounting irregularities became public in October 2001, Andersen employees began shredding documents and deleting emails on the orders of a senior partner. Investigators later concluded that tonnes of documents were destroyed in the weeks before the SEC formally requested them.

The U.S. Department of Justice indicted Arthur Andersen for obstruction of justice in March 2002. The indictment alone was fatal — major clients immediately terminated their relationships with the firm, unwilling to be associated with an indicted auditor. By June 2002, Arthur Andersen had ceased auditing public companies. 85,000 employees had lost their jobs. In 2005, the Supreme Court unanimously overturned the conviction, ruling that the jury instructions had been legally flawed. Arthur Andersen's conviction had been wrongful. But the firm was already gone — dissolved three years earlier, 89 days after the indictment, before any court had found it guilty. It remains the most dramatic corporate death in American professional services history.

William Welch Deloitte opened an accounting practice in London in 1845, at a time when the profession of accountancy barely existed as a formal discipline. His early clients included the Great Western Railway — one of the most ambitious infrastructure projects in Victorian England. The railways were the first businesses complex enough to require independent financial oversight. In 1849, Deloitte was appointed the first independent auditor of a public company in history.

Deloitte opened its first U.S. office in New York in 1893, following its British clients as they expanded into American markets. The U.S. would eventually become the firm's largest market. The transatlantic expansion established a template that the major accounting firms would follow for the next century: grow internationally by following clients, not by seeking new ones.

Deloitte Haskins & Sells merged with Touche Ross in 1989, creating Deloitte & Touche — one of the largest accounting mergers in history. The combined firm had over 60,000 employees in 100 countries. The merger was driven by the need to serve multinational clients who required consistent audit standards across borders. This consolidation dynamic would eventually reduce the global audit market to just four dominant firms.

When Arthur Andersen collapsed in 2002 following the Enron scandal, Deloitte was the only Big Five firm that did not aggressively acquire Andersen's practice. While KPMG, Ernst & Young, and Pwcabsorbed thousands of Andersen partners and clients, Deloitte grew more selectively. The restraint proved wise: the firms that grew fastest from Andersen's collapse also inherited the most regulatory scrutiny.

Deloitte reported revenues of approximately $64 billion in fiscal year 2023, making it the world's largest professional services firm — a position it retained for years afterward, ranked No. 1 by revenue by Gartner for the eighth consecutive year in 2025. The firm employed over 450,000 people across 150 countries. However, the consulting industry faced headwinds in 2024-2025: Deloitte cut advisory roles in the UK as large-scale project demand softened, and reduced U.S. government consulting headcount as federal contracts were restructured under the DOGE efficiency initiative. AI was simultaneously threatening to automate the analytical work that had made consulting firms valuable — and creating enormous new demand for AI strategy and implementation work. Deloitte was racing to position itself on both sides of that disruption.