why do big companies get their accounting done by accounting firms when they could afford to do it on their own?
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It isn’t always cost effective. Most large firms have a large internal finance department and will handle the majority of the accounting work at the corporate level. However, there are reasons to hire outside
1) Specific expertise. Certain areas like tax are very specialized and external consultants who are experts in that field are needed. Also things like automating accounting/financial functions require a lot of IT and software package knowledge, and large parts of that might be better done using external firms.
2) International accounting. Large firms operate in many countries. Each country has accounting rules and the firms have to prepare local accounts in accordance with the regulations in that country for every country it operates in. It doesn’t make sense for a firm to hire accountants for every country they operate in, so they hire consultants instead.
3) Law. All publicly traded companies are required by law (in the US, the SEC regulates this) to prepare and have accounts audited by third party firms who attest (under law) that the firm prepared their accounts properly.
4) Cost savings. It just might be less expensive to have an accounting firm do some of the transactional accounting. Large firms also (typically) pay large salaries and bonuses to their full time employees. A part of their accounting needs might be fairly simple and the firm outsources instead of hiring full time employees.
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