Ernst & Young (E&Y) and
Pricewaterhouse-Coopers (PwC) describe the past 12 months as
challenging as both reported substantial US dollar losses in global
revenues for 2009.

PwC, the world’s largest accounting network,
dropped revenue by 7 percent to $26.2 billion in US dollars in the
year to 30 June 2009. E&Y also reported a 7 percent drop in
revenue to $21.4 billion for the year ended 30 June 2009. PwC
reported its total gross revenues rose slightly at constant
exchange rates for the fiscal year, while E&Y said that in
local currency terms its year-on-year revenues decreased by less
than 1 percent.

For the fiscal year 2008/2009, E&Y decided
to eliminate including fees billed from within its network in an
effort to harmonise its policies across member firms as part of its
globalisation efforts. Eliminating inter-firm billings shaved $1.5
billion from E&Y’s previously reported 2008 FYE revenue, which
was reported as $24.5 billion.

PwC global operations leader Paul Boorman said
weak worldwide trading conditions was a major reason for the below
par results.PwC and Ernst & Young annual revenue 2005-2009

“Our results were not as good as we would have
liked of course but many of our firms held up well under the
circumstances,” Boorman said.

An E&Y spokesperson said network leaders
were still pleased with the results due to challenging market

“Flat revenues don’t tell the whole story of
this year. We invested in people, in building markets as part of
our globalisation strategy, and in being sensitive to the issues
our clients faced,” E&Y said.

The networks said service line revenues were
impacted by pricing pressure and fee reductions.

The recession had less of an impact on PwC’s
assurance services as it grew by 2 percent to $13.1 billion.
E&Y said it managed to offset most of the pricing pressure and
fee reductions by market-share gains although its assurance revenue
still decreased by 1 percent.

E&Y grew tax revenue by 2 percent while
the fee income of PwC’s tax service line remained flat.

Advisory services were the hardest hit for
PwC, as revenue dropped 3 percent to $6.1 billion. E&Y said its
risk management and performance improvement services had a
sustained demand, which resulted in advisory services increasing
revenue by 2 percent.

Despite the downturn, both E&Y and PwC
have continued to grow staff numbers. E&Y hired 37,800 people,
which includes 29,000 permanent staff and 8,800 interns, and PwC
hired 30,000 new staff members worldwide, increasing its total
headcount by 5 percent to 163,000.

Large firms in both networks made cutbacks
throughout the past year, most notably to struggling corporate
finance divisions.

“Economic conditions have forced some staff
cut backs in places but all of our firms work hard to maintain
staff levels, so we are well positioned to go forward when we come
out of a recession.” Boorman said.

“Our main focus has been to successfully
sustain a business and retain the people we need through the
difficult period to give us that strong platform [we need] to
continue serving clients in the recovery and to start to invest in
our own growth.”

Deloitte, with a May year-end, has yet to
report its global revenue for the 2009 fiscal year, although the
network’s largest firm reported a 3 percent revenue decline. A
Deloitte spokesperson said the network aimed to release its results
by the end of the month. If Deloitte manages better than a 4
percent contraction in combined global revenue in US dollar terms,
it will overtake PwC as the highest-earning network.

KPMG’s financial reporting period ends on 30
September 2009 and the network rarely releases figures before