Deloitte: Fiscal breakdownDeloitte has increased global revenue by 1.8% to
$26.6bn, momentarily inching ahead of rival

The network has also unveiled plans to
hire 250,000 accountants in the next five years, including 40,000
this year – a sign the network believes the global economy is

Deloitte’s growth is due to the
strength of its consulting business and solid demand in Asia and
Latin America. PricewaterhouseCoopers is due to release its global
figures in a month and will need to grow combined firm revenue by
at least 1.7% to hold onto top spot.

Deloitte global chief executive Jim
Quigley told the International Accounting Bulletin that it
is too early to tell whether Deloitte’s results are indicative of a
wider recovery from professional services networks. In the 2009
reporting year, network revenue contracted by 6% on average.

The Deloitte is seeing some major
differences in business sentiment compared with this time last

“Last year the question we were asking
is are we going to see a recovery,” Quigley said. “What has changed
is we now are talking about the shape of the recovery [and] I
believe we have begun a sustained recovery.

“I am seeing the economy firming and
confidence growing. Some of the capital that has been on the
sidelines is coming off and capital transactions create
opportunities for us.”

It is impossible to predict how
Deloitte’s great rival PwC will perform this year. In the past few
years, Deloitte has closed the gap on its rival (see chart
), although in the UK PwC recently reported stronger
growth than Deloitte. Whichever network ends up on top, the lead is
likely to be marginal.

Any revenue growth by accounting
networks is a positive result because economic conditions are still
tough in most western markets.

Race to the top: In the past five years Deloitte has closed the gap on PwC as the world’s largest accounting network

Fee pressure should ease

Deloitte’s global audit revenue
declined 1% to $11.7bn despite the network increasing its market
share of the Fortune Global 500 by 1%.

“We do have increased volume in the
context of service power but on a rate-per-hour basis there was
some softness and it is simply an outgrowth of the pressure broadly
for us to reduce [clients’] break even point and to try to squeeze
ever dollar,” Quigley said.

“[I expect to see this pressure
easing] because of the recovery, and through our continued
innovation and use of technology in delivering those services, we
will become more efficient.”

Tax revenue and financial advisory
revenue also dropped, with a global M&A drought affecting these

Deloitte’s strongest business was
consulting, which increased fee income by 15% to $7.5bn. This
growth included the acquisition of several consulting firms, such
as BearingPoint’s North American public sector practice and the UK
real estate consultancy Driver Jonas.

“As we see public sector spending
becoming an increasingly significant component of global GDP
there’s going to be an opportunity to serve the public officials
who have the stewardship responsibility for that significant
component of our economy,” Quigley said, adding that public sector
work increased 38%.

The other advisory areas that
performed particularly well were restructuring, strategies and
operations and technology consulting.

Quigley believes governance and risk
management is a service of the future and Deloitte is investing in
this area accordingly.

“We are assisting many businesses as
they become risk intelligent enterprises,” he says. “Also, there is
so much capital on the sidelines that we believe M&A is going
to be an area of significant growth opportunity. There’s also the
whole broad area of finance transformation in business

Another area Deloitte is looking to
get more involved in is data analytics.

Quigley notes that Asia-Pacific has
been the fastest growing region for Deloitte in the past five years
and he predicts this to continue.

Deloitte is investing most heavily in
the BRIC countries, followed by the Middle East and South-East
Asia. Quigley believes Indonesia and Vietnam are markets to

Deloitte has more than 170,000
employees. It plans to add to this by recruiting 50,000 new hires a
year. This indicates the network is optimistic about the future and
committed to remaining the largest employer of accountants in the

In a month, the network could also be
crowned the market leader in revenue.