Accounting Firms Plan Mega-Merger

And now, the Big Six are becoming four.

Accounting giants Ernst & Young LLP and KPMG Peat Marwick LLP said Monday they will merge, creating the nation’s largest accounting firm with about $18.3 billion in annual revenues.

Just last month, fellow Big Six companies Coopers & Lybrand and Price Waterhouse agreed to merge. That combined company will have $13 billion in annual revenues, which placed it temporarily on top of the list.

The moves are a reflection of the changing focus of the industry into a one-stop service that combines the traditional auditing and accounting of companies with consulting.

Neither combination has announced what its new name would be.

The firms had combined fiscal 1997 U.S. revenues of more than $7.5 billion and 47,500 employees.