[ 2013-08-12 ]

Digital needs drive sales 14% higher at Deloitte
Strong demand for its consultants and auditors
helped the UK arm of Deloitte post an 8 per cent
increase in annual sales, although its partners
nevertheless suffered a slight dip in their
average take-home profit.

The UK’s second-biggest auditor and consultant
by fee income posted sales of £2.51bn for the
year to May 31, up from £2.33bn a year earlier.

The firm’s consulting arm recorded a 14 per cent
increase in sales for the second consecutive year,
taking its contribution to the overall sales
figure to £596m.

David Sproul, chief executive and senior partner,
said its consulting business benefited from rising
demand for assistance on digital matters, data
analytics and cyber security.

Its audit arm, the bedrock of the business, saw
sales rise 12 per cent to £742m, meanwhile,
reflecting the growth of companies a rung below
the FTSE 100 index of leading listed companies.


The audit profession has been under pressure by
regulators dissatisfied at its performance during
the financial crisis and concerned by the long
periods that audit firms remain in place at
certain companies.

Mr Sproul said EU policy makers appeared
increasingly keen to force listed companies to
change audit firm periodically, a policy known as
mandatory rotation: “It is becoming a more
likely option.”

UK competition regulators shied away from
demanding mandatory rotation last month, saying
companies should merely be forced to put their
audit out to tender at least once every five
years.

The long-awaited EU audit reform would take
precedence over the UK’s attempt to shake up the
profession, however.

In spite of the sales growth, the profit pool
available for distribution to Deloitte’s
partners was broadly flat at £571m, compared with
£569m. Mr Sproul said that reflected staff
recruitment, investment in new projects and
pricing pressure.

The average profit payable to each partner was
£772,000, down from £789,000. The decline
followed an increase in the number of partners.
The profit allocated to Mr Sproul fell from £2.8m
to £2.7m.


Deloitte did not set aside any money during the
period to cover the fine it faces about work it
did for MG Rover and the “Phoenix Four” –
the quartet of businessmen who had led the
purchase of the carmaker from BMW before its
collapse.

A tribunal ruled last month that Deloitte and
Maghsoud Einollahi, one of its former partners,
had showed “a persistent and deliberate
disregard” of an industry ethical code during
the affair.

The penalty is yet to be announced. In a note to
its accounts, Deloitte said the outcome of the
case was still uncertain, adding that it might
appeal against the judgment.

Source - FT

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