Deloitte Touche Tohmatsu

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Deloitte Touche Tohmatsu
Type Swiss Verein
Founded London, United Kingdom (1845)
Headquarters New York & London
Key people James H. Quigley, CEO
John P. Connolly, Chairman
Industry Professional services
Services Audit
Tax
Consulting
Financial advisory
Revenue US$23.1 billion (2007)
Employees 155,000 (April 2007)
Website www.deloitte.com

Deloitte & Touche (also referred to as Deloitte Touche Tohmatsu, and branded as Deloitte.) is the largest (in staff numbers) accountancy and professional services firm in the world, and one of the Big Four auditors, along with PricewaterhouseCoopers, Ernst & Young, and KPMG. In addition to its accounting practice, Deloitte is one of the largest business advisory firms in the world, providing strategic and operational management consulting, tax advisory, and financial advisory services to many of the world's largest companies. Consulting currently provides 20% of revenue.

While having the full name of Deloitte Touche Tohmatsu, it branded itself Deloitte & Touche and then simply Deloitte. with a round green dot following the name. The rebranding campaign was commissioned by John P. Connolly, the Chairman of the firm, Chief Executive of the UK firm, and Senior Partner, who challenged Enterprise IG in 2003 to develop a brand image that represented the new position of the organization in the marketplace; encompassing the "complete firm", offering accounting and consulting services whilst rival firms had divested their consulting operations.

According to the firm's website as of 2007, Deloitte has approximately 150,000 professionals at work in over 140 countries, delivering audit, tax, consulting, and financial advisory services to more than one-half of the world's largest companies. The US firm employs close to 41,000 people (2007) and the UK firm employs over 11,000 people (2007).

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Confusingly, in the United Kingdom the local firm of Deloitte, Haskins & Sells merged instead with Coopers & Lybrand (which today is PricewaterhouseCoopers). For some years after the merger, the merged UK firm was called Coopers & Lybrand Deloitte and the local firm of Touche Ross kept its original name. In the mid-1990s however, both UK firms changed their names to match those of their respective international organisations.

In 1993, the international firm was renamed Deloitte Touche Tohmatsu, the third name coming from the firm Tohmatsu & Co, which merged into Touche Ross in 1975. The names in the company title refer to William Welch Deloitte, George Touche, and Admiral Nobuzo Kosmas Tohmatsu (等松). The name "Deloitte" is the firm name in longest continuous usage in the accounting profession. Deloitte Touche Tohmatsu is a Swiss Verein, a membership organization under the Swiss Civil Code whereby each member firm is a separate and independent legal entity. Its headquarters are located in Manhattan, New York City and London.

John Ballantine Niven established Touche Niven alongside Haskins & Sells in the Johnston Building at 30 Broad Street in 1900 in New York. At the time, there were fewer than 500 CPAs practicing in the United States, but the new era of income taxes was soon to generate enormous demand for accounting professionals.

In 1913, Niven opened the organization's first branch offices in Minneapolis and Chicago. That same year, the 16th Amendment to the Constitution allowed income tax to be levied on Americans for the first time. Compared with modern levels, the 1913 rate of 1% on taxable incomes over US$3,000, rising to 7% on taxable incomes over US$500,000, seems low, but, as the Journal of Accountancy noted that year, it was "indubitable that the income tax law is to have a more far-reaching effect upon public accountants than upon any other profession or business in the country."

The Journal was so convinced of the demands that it added a tax column—and asked Niven to be the editor. His column advised accountants on income tax requirements, preparing them for the impact of World War I, when federal spending rose from US$742 million in 1916 to US$18.9 billion in 1919. By then, income tax provided 58% of federal revenues, and the experts who handled income taxes found their skills in high demand.

There were numerous calls for independent auditing in the early decades of the century. But these calls were largely ignored by Washington and Wall Street regulators. The stock market crash of 1929 and the ensuing Depression brought the issue into the public spotlight, especially when it became obvious that proper accounting practices might have prevented some bankruptcies and consequent unemployment.

On April 1, 1933, Colonel Arthur Carter, President of the New York State Society of CPAs, testified before the U.S. Senate Committee on Banking and Currency. Carter helped convince Congress that independent audits should be mandatory for public corporations. The 1933 Securities Act subsequently required public corporations to file independently certified registration statements and periodic reports. A year later, the Securities and Exchange Commission was created to administer the new legislation.

After World War II, America stood on the brink of historic economic expansion. In this environment, in 1947, Detroit accountant George Bailey, then president of the American Institute of Certified Public Accountants, launched his own organization. The new entity enjoyed such a positive start that in less than a year, the partners merged with Touche Niven and A.R. Smart to form Touche, Niven, Bailey & Smart. Headed by Bailey, the organization grew rapidly, in part by creating a dedicated Management Consulting (MC) function. It also forged closer links with organizations established by the cofounder of Touche Niven, George Touche: the Canadian organization Ross, Touche and the British organization George A. Touche. In 1960, the organization was renamed Touche, Ross, Bailey & Smart, becoming Touche Ross in 1969. John William Queenan joined Haskins & Sells in 1936. As managing partner from 1956 until his retirement in 1970, he led the organization through major developments in the profession. Haskins & Sells experienced its own major development by merging with 26 domestic organizations and establishing offices in Canada, Central and South America, Europe, and Japan.

In 1952, Touche Ross became the first large accounting organization to automate its bookkeeping. Later, Gordon Stubbs wrote Data Processing by Electronics and Introduction to Data Processing, the first two professional brochures of their kind. In 1964, the organization's work with statistical sampling led to the Auditape System, which brought computer technology to audits. The organization's MC group, which provided computer systems advice, felt the greatest impact from the technology revolution. The organization did work for several leading corporations and for many government agencies. At Touche Ross, the discipline matured during the 1960s and 1970s under leaders like Robert Trueblood and Michael Chetkovich.

In 1982, David Moxley and W. Grant Gregory succeeded Russell Palmer as leaders of Touche Ross. In 1985, Edward A. Kangas, a management consultant, was appointed managing partner of Touche Ross. In 1984, J. Michael Cook became managing partner of Deloitte Haskins Sells.

Touche Ross and Deloitte Haskins Sells merged in 1989. The newly formed Deloitte & Touche was led by J. Michael Cook and Edward A. Kangas.

As part of a larger effort to effectively target and recruit qualified candidates from underrepresented groups, Deloitte implemented the Women's Initiative (WIN) in 1993 which is intended to make Deloitte a firm where "high-performing" women can find careers that are both satisfying and that provide expanding advancement opportunities. Deloitte USA also claims to have the highest percentage of women directors, partners, and principals among the Big Four accounting firms.

Deloitte Office Building in Downtown Chicago
Deloitte Office Building in Downtown Chicago

In 1995, the partners of Deloitte & Touche voted to create Deloitte & Touche Consulting Group (later Deloitte Consulting). Deloitte's stated goal continues to be to “simplify work so that it can be done more rapidly and more effectively.”

Deloitte & Touche USA LLP (the US member firm) is comprised of several function-specific subsidiaries, each of which is a separate legal entity but a wholly owned subsidiary. Some countries' member firms are organized differently.

  • Deloitte Consulting LLP: Provides consulting services to various clients in Financial Services, Consumer & Industrial Products, Health Care & Life Sciences, Public Sector, and other industries and subcategories. The specific consulting capabilities are organized into Service Areas: Enterprise Applications, Technology Integration, Strategy & Operations, Human Capital, and Extended Business Services (XBS), which are further broken down into relevant subcategories. They concentrate on providing more solid and defined business processes for companies which previously lacked them.
  • Deloitte & Touche LLP: This function is known internally as Audit & Enterprise Risk Services (AERS), and provides the firm's traditional accounting and audit services, as well as offerings in risk management, security & privacy and control assurance.
  • Deloitte Tax LLP: This function provides traditional tax advisory services to clients, as well as offerings in tax systems and advisory of tax implications on various parts of the business: mergers & acquisitions, ERP package implementation, etc.
  • Deloitte Financial Advisory Services LLP: This function provides financial advisory services to clients, including dispute, forensics, and valuation.
  • Deloitte Services LP: While not a client-facing subsidiary, this vital function comprises the people that operate the firm itself, such as human resources, mail and printing services, technology support, administrative assistants, and marketing.

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Deloitte has been repeatedly named in lists of top workplaces. Some examples include:

  • "2007 #1 Place to Start your Career BusinessWeek magazine[1]
  • "100 Best Companies to Work For" by Fortune magazine
  • "100 Best Companies for Working Mothers" for 2004 by Working Mother magazine
  • "Top 50 Best Companies for Diversity" -- Essence's Top 30 Best Companies for African-American Women List
  • Latina Style - One of The Best Companies for Latinas
  • Trainingmag.com - # 6 on list of Top 100 companies

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Please see the discussion on the talk page.(December 2007)
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  • Adelphia scandal - more info here and here. The Securities and Exchange Commission announced on April 26, 2005 that Deloitte had agreed to pay $50 million to settle charges relating to Adelphia's 2000 financial statements.
  • Guangdong Kelon Electrical Holdings Co
  • iSoft
  • Parmalat
  • Irish Health Service Executive Massive defrauding of Irish Health Care system through poor consulting support of health accounts system software in 2005 led to major cost overruns, and finally the Irish Health Service Executive pulling the plug on the computer system entirely after substantial cash outlays.[2]
  • Los Angeles Unified School District BTS payroll system: Sold to LAUSD for US$95 million, the BTS payroll system started in January 2007 has never worked correctly. Instead of salaried paychecks, schoolteachers and personnel have been underpaid, overpaid, or not paid at all. Deloitte's response has been to charge the school district an additional US$37 million for fixes and improvements that have still, as of December 2007, not worked to correct the flawed BTS payroll system. The total amount spent as of December 2007 is US$140 million.[3][4][5][6][7][8] The United Teachers Los Angeles (UTLA) has been seeking remedy from the company and the district, to no avail.
  • Haringey Council Tech Refresh Project A local government IT project in the UK, in which costs rose from £9m to £24.6m. Deloitte were consultants on the project, despite being employed at the same time as the council's auditors.

Major clients include (note that not all of these are audit clients):

  1. ^ (Business Week Article)
  2. ^ http://www.e-health-insider.com/news/item.cfm?ID=1470
  3. ^ http://blogs.zdnet.com/projectfailures/?p=431
  4. ^ http://www.latimes.com/news/local/la-me-payroll25aug25,1,7663181.story
  5. ^ http://www.eweek.com/article2/0,1895,2192653,00.asp
  6. ^ http://media.www.dailytrojan.com/media/storage/paper679/news/2007/09/27/News/Lausd.Teachers.Start.Boycott-2995901.shtml
  7. ^ http://www.dailynews.com/theiropinion/ci_7038153
  8. ^ http://www.dailynews.com/news/ci_7733735]

v • d • e
Big Four auditors
Deloitte Touche Tohmatsu · Ernst & Young · KPMG · PricewaterhouseCoopers
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