Deloitte has registered a fifth consecutive year of growth, reporting global revenues of $34.2bn in the year to 31 May 2014, up by 5.7% (6.5% in local currency) compared to the previous year.
Deloitte Global CEO Barry Salzberg said he was proud of the network’s ability to maintain a good level of growth "focusing on quality while dealing with difficult economic environments and various recessions around the world".
Deloitte’s key factors for success were the firm’s focus on quality, people and delivering innovative solutions, according to Salzberg.
"We identified the areas in the world where growth is happening and demand is present, cyber for example, and we invested in those areas which helped us produce these results," he continued.
Consulting led the global network’s boost in revenue with double digit growth in local currency (10.3%), up to $11.4bn. The fastest growing services in this area were strategy & operations (10.5%), technology (10.3%), and human capital (9.6%).
"In fact Deloitte consulting practices have grown robustly for the last eight years," Salzberg said. "This trend reflects greater opportunity for consulting services as businesses adjust to new economic and technological necessities."
As businesses have an increased interest to address efficiency, cross management restructuring, risk and cyber related areas, Salzberg said it will continue to be an area of opportunities in the coming years.
However Deloitte experienced good performances in local currency across all its service lines with audit growing by 2.5%, up to $10.1bn; tax and legal by 7.7%, up to $6.5bn; financial advisory by 6.8% up to $3.0bn; and enterprise risk services by 4.2% up to $3.2bn.
Asked about the increasing challenges in the audit service line, Salzberg said: "When you compare it to consulting which is a high demand services market, audit looks less robust but our growth rate in audit was higher than previous years so we are obviously extending our practice and increasing our quality."
Audit and/or advisory
In recent years, with shrinking audit fees and increased regulatory compliance, accounting networks, and the Big Four in particular, have looked for additional revenues in the advisory and consulting arena.
This strategy had been highly criticised in the wake of the Enron scandal in the early noughties, and some regulators have since put in place measures to draw a clear line between audit and non-audit services.
"We are well aware of our responsibilities in serving the public interest and we are never going to take our eye off of the most important ball which is quality and particularly audit quality as we have a commitment to the public and to the various stakeholders that have an interest in that," Salzberg said in response to those criticising the Big Four recent investments in consulting.
In a world of increasing complexity and greater and broader clients’ needs having an advisory and consulting practice "is almost quintessentially important" to delivering an effective audit, according to Salzberg. "When you look at what you need to do an audit you need accrual services, tax services, valuation services, industry capabilities and the list can go on so having a robust consulting practice can only contribute to the production of a high value audit."
Salzberg said he looked at it as a very smart business model for Deloitte and concluded: "I think that as long as we continue both in law and spirit follow the rules we will continue to deliver well to the market on our professional responsibilities."
Positive results globally
Deloitte reported an uptake in revenues across the globe with emerging economies reporting the fastest growth: Africa grew by 17.6%and Latin America 14.1%.
"Both of those markets have great opportunities as they are maturing themselves as markets," Salzberg said. "These are places that are demonstrating growth broadly over a period of time in their turnarounds, investments, and competitiveness as countries and as a result we are seeing an increase demand from clients that operate there."
The US remained Deloitte’s largest market and led a 7.5% growth across the Americas.
The second biggest region of the global network, Europe, Middle East, and Africa (EMEA), grew by 5.8% in local currency with Italy (11.5%), Germany (11.8%) and France (10.5%)leading the way.
Japan, India and New Zealand have been the best performing countries in Asia Pacific, according to Deloitte, and contributed to the regional growth of 4.9% in local currency.
The network hired 54,000 professionals in the year, bringing their total workforce to 210,400 compared to 202,885 in 2013.
Race to the top
Last year, Deloitte overtook PwC as the largest global network by a $300m margin. However PwC have since been very active in the transaction market acquiring a number of advisory practices, and more notably the global consultancy Booz & Co.
This deal alone is expected to bring an added $1.4bn in revenues to PwC.
PwC will release their annual results next month and only then will Deloitte know if they have retained their crown.