A recent study by International Accounting Bulletin (IAB) shows a significant improvement in the performance of accounting firms across the globe,according to industry analysts.
According to the results from the Annual World Survey, which involved research from 40 leading accounting firms, movement in revenue among the Big Four firms, Deloitte, PwC, Ernst & Young and KPMG have taken a turn for the better. Deloitte pushed forward and surpassed PwC for the first time with $9 million, thus separating the two firms. Also, included in the findings were trends in recruitment, which remained stable last year but is expected to grow in 2011.
‘This year’s survey shows definite improvement, with only four networks failing to grow revenue, which is a complete turnaround in fortunes from last year. Revenue growth for networks increased 2 percent,’ says Arvind Hickman, editor of the UK-based magazine.
In another study titled, 2010 Big Four Firms Financial Performance Analysis, conducted by Big4.com, a social networking forum indicates a positive turnaround for the top accounting firms as a result of overall global economic improvement. After five consecutive years of double-digit revenue growth a drastic decline was recorded in 2009 but a sudden reversal in growth was seen last year.
‘After a difficult 2009, 2010 fiscal year saw small increases in revenues for Deloitte, Ernst &Young, KPMG and PWC,’ says David Hunter vice president of the networking forum. ‘Revenues increased between negative 0.9 and positive 2.6 percent from 2009, as firms were aided by a general global recovery.’
Hunter adds that with a spur in enhanced equity markets, improved credit conditions, together with better M&A and IPO activity lead to an increase in client demand especially for advisory services and in Asia.
The study further highlighted that in 2010, Deloitte generated revenues of $26.578 billion and growth of 1.8 percent, just shy of PwC's revenues of $26.569 billion and an increase of 1.5 percent. Deloitte sprung ahead of PwC by a small but significant margin of $9 million. Running behind these two firms, Ernst & Young was placed third with 2010 revenues of $21.440 billion, however its revenues shrank 0.9 percent from 2009. And the last is KPMG, which remained the smallest firm with revenues of $20.630 billion, but had the highest growth at 2.6 percent.
Both analyses highlights that the strongest growth regions are China (20 percent), India (14 percent) and Brazil (11 percent) with evidence of high investment in these areas. Moreover, it was observed that US, Russia and Australia were seen to have challenging trading conditions, which were a result of widespread inconsistency in revenue.
‘Revenues were generally flat in most developed regions, while growth bounced back to strong levels in emerging markets of Asia and Latin America,’ Hunter says.
