PricewaterhouseCoopers (PwC) remains the highest earning global accountancy network despite a significant slowdown in its assurance service line. PwC reported strong growth across emerging markets but much more modest growth in North America and the Caribbean regions.
The network revealed the combined gross revenues of firms grew 8 percent before exchange rate effects to $28.2 billion for the fiscal year ended 30 June 2008. Growth in US dollars, as illustrated in the table (below), was 14 percent.
PwC reported strong revenue growth of 14 percent to $6.9 billion in advisory services. The network’s tax business also increased revenues by a healthy 13 percent to $7.5 billion. However, the firm’s assurance practice only grew 3 percent to $13.8 billion, which is well below growth levels in previous years. The network noted that for the first time tax and advisory services accounted for more than half of global revenues (51 percent).
PwC’s revenue in emerging economies escalated by 21 percent. This was driven by firms in Asia (21 percent), the Middle East and Africa (20 percent), and Central and Eastern Europe (20 percent). Western European member firms enjoyed steady growth of 8 percent but North American and Caribbean firms only increased revenues by 2 percent.
In releasing the financial results, PwC also confirmed that partners have given the green light for a global restructure, splitting the management of the network into three regional clusters.
PwC International chief executive Samuel DiPiazza welcomed the endorsement, and said: “This new structure will give us the agility and speed needed to continue our expansion in the emerging markets. It will allow us to more closely align our strategy around the world, further improve the integrated service we offer clients and maintain our approach of local delivery of global services.”
On PwC’s financial results, DiPiazza said member firms continue to lead in many markets and overall growth reflects a strategic focus on key emerging economies – a theme that has been mirrored by Big Four rivals.
“Despite the challenges posed by the continuing credit crunch particularly, in developed markets, PwC’s results held up well, and all of our lines of business and firms continue to grow,” he added.
Earlier this year, the second-largest global network, Deloitte, revealed it has increased revenues by 13 percent in local currencies to $27.4 billion. There is now a revenue difference of $600 million between the two networks, which means Deloitte has closed the gap by $1.5 billion on PwC in the past financial year. The last time Deloitte dislodged PwC from the top spot was in fiscal year 2003, but PwC out-earned Deloitte a year later and has remained the highest earning network ever since.