The rise of accounting’s second tier firms

By Gary Anders

In terms of sheer scale, Australia’s four largest accounting firms, also known as the “Big Four” — Deloitte, EY, KPMG and PwC — continue to dominate.

As well as being the accounting industry’s largest employers, they still generate the biggest revenues by providing services to governments and companies that include multinational organisations requiring complex audits, tax structures and strategic advisory work.

According to the Australian Financial Review’s 2025 list of the Top 100 Accounting Firms, each of the Big Four recorded revenues of over A$2 billion last year. 

However, a closer look at the latest revenue numbers tells a much deeper story about the change at the top end of the Australian accounting industry.

While all Big Four firms recorded revenue declines, the bulk of second-tier firms that make up the remainder of the Top 100 recorded solid revenue growth.

The reasons for this are numerous and complex. Various accounting, audit and other reputation-damaging incidents have beset several of the Big Four in recent years, resulting in sales of assets, operational restructurings and a loss of clients.

For their part, mid-tier firms are winning business by catering to clients who want more personalised service, greater partner access, industry specific advice and lower fees. 

What’s contributing to mid-market accounting firm growth?

“What we are seeing is a broadening of choice for businesses, driven by shifts in expectations around value, access and trust,” says Jenny Wong, tax lead, policy and advocacy at CPA Australia.

Wong says the Big Four firms still have unmatched global reach, deep specialisation and the ability to mobilise large teams quickly. Yet, for many clients, she says the question is no longer “Can they do it?” but “Do they understand my business better?”.

 

"Many clients, particularly mid sized companies and sophisticated small businesses, want direct access to senior decision makers. Second tier firms often have flatter structures, which means clients feel closer to the people who understand their business."

 

“Mid tier and second tier firms have carved out a strong position by offering high touch, relationship driven services at a time when clients are seeking more personalised support,” Wong says.

“Many clients, particularly mid sized companies and sophisticated small businesses, want direct access to senior decision makers. Second tier firms often have flatter structures, which means clients feel closer to the people who understand their business.”

BDO, which ranks as the fifth largest Australian firm, recorded a 12.3 per cent rise in revenue to A$606.51 million in 2025. David Garvey, chief executive partner at BDO Australia, shares what he believes contributed to the company’s position.

“We have got a really broad client base, and that is probably one of the things that is a strength for our firm — it makes us really resilient. 

“The professional services market is crowded, so we make sure to stay close to our clients in terms of their feedback,” he says. 

Brendan Britten, managing partner at Pitcher Partners Melbourne, says his firm is focused on working alongside and advocating for middle market businesses and the individuals who drive them. 

However, mid-sized firms face many of the same issues as the big players.

“The business sector powers the economy; it is a major employer and is critical to Australia’s success — yet it can be overburdened by taxes and regulation, and misunderstood by policymakers.”

Pitcher Partner’s revenue rose by 2 per cent in 2025 to A$355.93 million, ranking it as the ninth largest firm in Australia.

The challenges and risks facing mid-tier firms

Scale still matters for large, complex, multinational engagements. 

Indeed, that is where the Big Four continue to dominate, due to their huge scale and global expertise. By contrast, some mid tier firms may need to collaborate across networks or invest further in specialist capabilities to compete at the top end.

Another challenge is governance. Managing potential conflicts of interest is just as important in the smaller mid-tier firms as it is in the Big Four, especially in businesses with vertically integrated accounting models spanning audit, tax, corporate advisory, financial advice and wealth management.

“As mid tier firms grow and diversify, they face the same need for robust independence frameworks and transparent governance,” Wong says.

 

"We have got a really broad client base, and that is probably one of the things that is a strength for our firm — it makes us really resilient. But the value proposition of having an engaged workforce and an engaged partner group is critical to providing great service to our clients."

 

Garvey says he is conscious of avoiding any conflicts or issues around independence.

“We are a reasonably large organisation, but in terms of the services we provide, we manage quality, risk and governance really closely.” 

Britten adds that all professional services firms have become more alert to the risk of conflicts in recent years.

“Our approach is to play to our strengths, ensuring that all conflicts are managed carefully — including via partnerships or referrals where necessary — but also building our capacity in areas that are becoming critical for clients.”

Mid-tier firms are becoming more attractive for new graduates

Supporting the rising challenge from mid-tier firms has meant a wave of partner moves from the Big Four over the past 12 to 18 months.

“We are seeing experienced former Big Four partners move into mid tier firms, and that migration has strengthened the depth and quality available in the mid tier,” Wong says. 

Michael Davern FCPA, chair of accounting and business information systems at The University of Melbourne, says he is also aware of Big Four partner moves to smaller firms, adding that many university accounting students are now looking beyond the Big Four graduate programs to those offered by mid-tier firms.

“From what I have seen, even on campus, the directions that students are wanting to go is changing dramatically,” he says, noting that he believes the mid-tier firms are attracting graduates because they can provide good training and the potential of a faster career track.

“When I graduated over 35 years ago, I think 95 per cent of us wanted to go to a Big Four firm to get on the partner track. Nobody is thinking that long term now, and that is where the mid-tier is becoming more attractive for some of the junior talent.”