The world’s second largest accountancy network revealed it was a
record-breaking year of growth. Deloitte reported aggregate member
firm revenue of $27.4 billion in the financial year to 31 May 2008,
an increase of 18.6 percent in US dollars and 13 percent in local
Last year, PricewaterhouseCoopers reported fee income of $25.2
billion and the world’s largest network will need to grow by about
9 percent to remain the highest revenue earning firm.
Deloitte Global chief executive Jim Quigley said Deloitte’s
ultimate goal is not to overtake its rival in terms of size or
combined revenue, but to become regarded as the market leader in
“[This is] the strongest year we’ve ever enjoyed.” Quigley said.
“To set the goal to be the largest just isn’t the goal that we’ve
pursued, but a goal to be the very best is something we have
Leading the way
Deloitte’s Asia-Pacific firms experienced the strongest growth
in the network of 30 percent to $3.2 billion. This included every
Asia-Pacific member firm delivering double-digit revenue growth.
The Europe, Middle East and Africa region increased revenue by 22.6
percent to $11.3 billion, with the Commonwealth of Independent
States (CIS) firm growing 41 percent. The network’s Australian and
Japanese firms enjoyed particularly strong years in Asia-Pacific,
while Russia fuelled the growth in the CIS.
The Americas improved revenues by 13 percent to $13 billion;
Latin America and the Caribbean leading the region with 22 percent
Quigley said Deloitte will be heavily investing and expanding
its services in the Middle East, India and China, which will
involve re-deploying partners from developed firms to the region as
well as an aggressive recruitment drive. “Our practice and our
investment both follow the growth in GDP and growth in the capital
markets,” he explained.
In terms of service lines, it was a strong year for Deloitte’s
financial advisory arm, growing nearly 27 percent to $2.4 billion.
Consulting services increased 22 percent to $6.3 billion, tax and
legal jumped 20 percent to $6 billion and audit grew by about 15
percent to $12.7 billion. Quigley told the International
Accounting Bulletin that Deloitte’s decision to retain its
consulting arm post-Enron, at a time when rival firms sold off
their consulting businesses, has paid off handsomely.
“There’s no question that was the single most significant
strategic decision that was made which is making a difference in
the relative standing of the Big Four accountancy networks,” he
“Our decision to segment the market rather than segmenting our
firm was a bit of a controversial decision when taken but I believe
it has made all of the difference. It strengthens significantly our
ability to deliver value to our clients and the depth of our
industry knowledge and perspectives we can bring to a whole variety
of issues, not just consulting issues, but business issue in
general, including audit quality.”
Quigley explained that Deloitte segments markets by choosing
about 23 percent of clients for consulting services and the
remainder for traditional assurance services in order to comply
with independence requirements. He said clients going through major
transformations are often best suited for consulting as this is
where the firm can add more value.
In the financial services arm, Deloitte’s forensic accounting
and investigations practice had a particularly good year, as has
corporate finance. Quigley said these practices have been in great
demand because of recent turbulent times.
He noted that the network’s audit growth was largely driven by
strong growth in the emerging markets as Sarbanes-Oxley and other
work resulting from regulatory changes in mature markets tailed
Quigley said globalisation continues to drive demand for
services related to international tax, transfer pricing, indirect
tax, consulting and advisory.