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Deloitte

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Deloitte Touche Tohmatsu
Company typeSwiss Verein
IndustryProfessional services
FoundedLondon, United Kingdom (1845)
HeadquartersNew York City, United States
Key people
John Connolly, Chairman
Jim Quigley, CEO
ServicesAudit
Consulting
Financial advisory
Tax
RevenueIncrease US$27.4 billion (2008)
Number of employees
165,000 (May 2008)
Websitewww.deloitte.com/global

Deloitte Touche Tohmatsu (also branded as Deloitte) is one of the largest professional services organizations in the world and one of the Big Four auditors, along with PricewaterhouseCoopers, Ernst & Young, and KPMG.

According to the organization's website As of 2008, Deloitte has approximately 165,000 professionals at work in 140 countries, delivering audit, tax, consulting and financial advisory services through its member firms.

Its global headquarters are located in New York City, New York.[1] European headquarters are located in London.

History

Early history

See also: Ultramares Corporation v. Touche

In 1845 William Welch Deloitte opened an office in Basinghall Street in London. Deloitte was the first person to be appointed an independent auditor of a public company.[2] He went on to open an office in New York in 1880.[2]

In 1895 Charles Waldo Haskins and Eijah Watt Sells formed Haskins & Sells in New York.[2]

In 1898 George Touche established an office in London and then in 1900 joined John Ballantine Niven in establishing the firm of Touche Niven in the Johnston Building at 30 Broad Street in New York.[2] 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.

On April 1, 1933, Colonel Arthur Hazelton Carter, President of the New York State Society of Certified Public Accountants and Managing Partner of Haskins & Sells, testified before the U.S. Senate Committee on Banking and Currency. Carter helped convince Congress that independent audits should be mandatory for public companies.[2]

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.[2] Headed by Bailey, the organization grew rapidly, in part by creating a dedicated management consulting function. It also forged closer links with organizations established by the co-founder of Touche Niven, George Touche: the Canadian organization Ross and the British organization George A. Touche.[2] In 1960, the firm was renamed Touche, Ross, Bailey & Smart, becoming Touche Ross in 1969.[2]

Mergers

In 1952 Deloitte merged with Haskins & Sells to form Deloitte, Haskins & Sells.[2] In 1968 Nobuzo Tohmatsu formed Tohmatsu Awoki & Co, a firm based in Japan that was to become part of the Touche Ross network in 1975.[2] In 1972 Robert Trueblood, Chairman of Touche Ross, led the committee responsible for recommending the establishment of the Financial Accounting Standards Board.[2] He led the expansion of Touche Ross in that era.

In 1982, David Moxley and W. Grant Gregory became the leaders at 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.

In 1989 Deloitte Haskins & Sells merged with Touche Ross to form Deloitte & Touche. The merged firm was led jointly by J. Michael Cook and Edward A. Kangas. Led by the UK partnership, a smaller number of Deloitte Haskins & Sells member firms rejected the merger with Touche Ross and shortly thereafter merged with Coopers & Lybrand to form Coopers & Lybrand Deloitte (later to become PwC),[3] some member firms of Touche Ross also rejected the merger with Deloitte Haskins & Sells and merged with other firms.[3]

Recent history

Deloitte Office Building in Downtown Chicago

In 1993 the international firm was renamed Deloitte Touche Tohmatsu to reflect the contribution from the Japanese firm.[2]

In 1995, the partners of Deloitte & Touche decided to create Deloitte & Touche Consulting Group (now known as Deloitte Consulting).[4]

Global structure

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.

Name and branding

While in 1989, in most countries, Deloitte, Haskins & Sells merged with Touche Ross forming Deloitte & Touche, in the United Kingdom the local firm of Deloitte, Haskins & Sells merged instead with Coopers & Lybrand (which today is PWC).[5] 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.

While the full name of the Swiss verein is Deloitte Touche Tohmatsu, in 1989 it initially branded itself Deloitte & Touche and then simply Deloitte. In 2003 the rebranding campaign was commissioned by Bill Parrett, the then CEO of DTT, and led by Jerry Leamon, the global Clients and Markets leader.[6]

Services

Deloitte member firms offer services in the following functions, with country-specific variations on their legal implementation (i.e. all operating within a single company or through separate legal entities operating as subsidiaries of an umbrella legal entity for the country).[7]

Deloitte serves various clients in financial services (FSI), consumer & industrial products (CIP), energy & resources, health care & life sciences (HCLS), public sector (PS), technology, media, & telecommunications (TMT), and other industries and subcategories. All services are not offered in all countries.

Deloitte does not place as strong an emphasis on the offshoring model as some of the other professional services companies. However, the U.S. member firm has investments in delivery centers in India, known internally as "Region 10."

There are also non-client-facing subsidiaries that comprise the people that operate the firm itself, such as finance (except project controllers); human resources; communications; marketing; Strategy, Research & Innovation (SR&I); mail and printing services; technology support; and administrative assistants. Other subsidiaries exist to maintain ownership of Deloitte's various intellectual property assets.

Sarbanes-Oxley regulations apply to what combinations of services Deloitte's U.S. member firm can provide a client. For example, a particular client may not be able to engage Deloitte for both corporate audit and consulting services at the same time. Additionally, Deloitte staff in client-facing positions must certify independence from financial interests in the firm's clients at least annually to avoid conflicts of interest and insider trading.

Staff

Deloitte offers its staff a variety of career models to choose from based on their preferences, geographic location and business need. These career models also vary for each function. Traditional titles for Consulting are "analyst" through "principal", FAS has "associate" through "partner", and the delivery-focused track features "specialist" through "specialist leader".

Deloitte hires entry-level personnel to client-facing functions through their graduate recruitment programs at selected universities. Also, the "partner" title is specifically reserved for top-level executives holding a CPA (or their country's equivalent).

The organization is consistently rated by Fortune as one of their "100 Best Companies To Work For".[11]

In 2007, Deloitte was rated the number one place to launch your career by BusinessWeek.[12]

Corporate Social Networking

The U.S. member firm of Deloitte has deployed a social/professional networking environment for its consultants.[13] Deloitte's "D Street" began when the firm's talent organization wanted to make a large company feel smaller. In addition, it wanted to create an environment that would appeal to its mostly younger workforce. After getting the support of Deloitte leadership and partnering with internal IT, communications and knowledge management groups, the team launched the alpha version of D Street in June 2007, basing it on a commercially available collaborative platform. The initial rollout was to 1,500 employees.[14] Deloitte also leverages an expertise discovery device known as iConnect.[15] iConnect conducts a keyword search across any relevant user-driven database to highlight who may possess knowledge that is of use to others. The process of discovery is obscured from the person discovered.

Major clients

Major clients include (note that not all of these are audit clients nor have they been confirmed by Deloitte member firms):

Criticisms

Disputes involving Deloitte include:

  • Adelphia Communications Corporation - 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.[16]
  • Guangdong Kelon Electrical Holdings - Investors have claimed that there was a failure to alert them to the company's poor financial position.[17]
  • Haringey Council Refresh Project - A local government IT project in the UK, in which costs rose from £9 m to £24.6 m. Deloitte were consultants on the project, despite being employed at the same time as the council's auditors.[18]
  • Irish Health Service Executive - Poor consulting support of health accounts system software in 2005 led to major cost overruns and the Irish Health Service Executive pulling the plug on the computer system entirely after substantial cash outlays.[19]
  • Los Angeles Unified School District (LAUSD) - The firm implemented the SAP HR system for LAUSD for $95 m and because of faults in the system, some teachers were underpaid, overpaid, or not paid at all.[20] As of December 31, 2007 LAUSD had incurred a total of $140 m in payments to Deloitte to get the system working properly.[21] In 2008 there was some evidence that that the payroll issues had started to stabilize with errors below 1% according to LAUSD's chief operating officer.[22]

Sponsorship

The U.K. member firm of Deloitte is a sponsor of the London 2012 Olympics.[23] The Canadian member firm is also the official professional services supplier for the 2010 Vancouver Winter Olympic Games[24] and 2010 Winter Paralympic Games.[25]

Notable current and former employees

Business

Politics and public service

Other

See also

References

  1. ^ Deloitte Head Office
  2. ^ a b c d e f g h i j k l Deloitte history
  3. ^ a b Deloitte Touche merger done The New York Times
  4. ^ Deloitte & Touche Consulting Group take more than 30 organisations live with SAP
  5. ^ PWC: History and milestones
  6. ^ Ernst & Young launches rebrand plan (refers to Deloitte rebranding in 2003)
  7. ^ Deloitte: Services offered
  8. ^ Assurance & Advisory services
  9. ^ Deloitte: Financial Advisory services
  10. ^ Deloitte: Tax services
  11. ^ Fortune: 100 best companies to work for
  12. ^ Businessweek
  13. ^ "Firm's social network" GreenDotLife Discussion Board, October 29, 2007.
  14. ^ "The new employee connection: Social networking behind the firewall" Computer World, August 11, 2008.
  15. ^ Managing expertise at Deloitte
  16. ^ Deloitte settles in Adelphia scandal
  17. ^ Deloitte faces double trouble in China
  18. ^ How a London council's visionary IT plan became a project management nightmare
  19. ^ E-Health Insider :: Ireland suspends two national health IT projects
  20. ^ LAUSD teachers start boycott
  21. ^ Los Angeles school district SAP implementation still broken
  22. ^ Update: LAUSD payroll problems stabilized
  23. ^ Deloitte becomes first London 2012 tier two sponsor
  24. ^ Vancouver 2010 Paralympic Winter Games
  25. ^ Deloitte named Official Professional Services Provider to Vancouver 2010 Winter Games

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