Deloitte 'audit' income soars
Deloitte's audit incomes climbs by more than 15% as the Big Four firm benefits from Sarbanes-Oxley and IFRS work
A 15.7% increase in ‘audit‘ fees was the major contributor to revenue growth
of 8.8% in 2005 at Deloitte, as the Big Four firm cashed in on a tighter
regulatory environment and new accounting standards.
John Connolly, Deloitte’s chief executive, said the increase in audit income,
which came in at £416m and included what the firm described as ‘risk consulting
services’, was driven by the introduction of Sarbanes-Oxley regulations in
companies with US listings and IFRS assurance.
‘The increase in audit income has more to do with an increase in risk
consulting. There has been a raft of regulatory change with Sarbox and IFRS,’
Connolly said, adding that roughly half of the audit income came from ‘risk
consulting’.
The increase in audit income made it Deloitte’s biggest earner, making up
30.7% of £1.3bn revenue pot, edging out the firm’s traditional number one
revenue stream – tax advice, which brought in £386m – for the first time.
Connolly, the firm’s top earner with a pay package of £3.6m, said he hoped
the rise in audit fees was not ‘spike’ as a result of the new regulations,
indicating that the firm was aiming to grow audit income by 11% over the next
year.
Deloitte’s corporate finance business, meanwhile, grew by 11.5% to hit £241m.
Consulting earnings of £312m showed an increase of 6.2%.