Deloitte Profile

During the Industrial Revolution “a new type of enterprise that raised capital by selling equity to the public” appeared. The boom in “joint stock companies created demand for people skilled at understanding and solving complex business problems” and so, in 1845 the first office of the firm opened in London, founded by William Welch Deloitte who in 1849 audited the famous Great Western Railway; making him the first independent auditor of a public company. The results and experience “so valuable that GWR directors recommended compulsory independent oversight,” which was gradually implemented, first in England and then the rest of the world.

In 1890, Deloitte opened a branch office on Wall Street headed by Edward Adams and P.D. Griffiths as branch managers. In 1896, Charles Waldo Haskins and Elijah Watt Sells founded Haskins & Sells in New York after successfully giving recommendations to the US government which resulted in $600,000 a year in savings while improving work quality. Later on, Haskins & Sells opened new offices in Chicago & London, leading the accounting profession to maturity.

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 with fewer than 500 CPA, but this will soon grow exponentially with the “new era of income tax”. In 1913, “the 16th Amendment of the US Constitution allowed income tax to be levied on US citizens for the first time”, with a very “far-reaching effect upon public accountants.”

Following the stock market crash of 1929 and the ensuing economic depressión that came with it, independent auditing was brought into the spotlight “when it became obvious that proper accounting practices might have prevented some bankruptcies and consequent unemployment.” And so, on March 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” helping convince the congress to make mandatory independent audits for public companies. This occurred 84 years after William Welch Delloitte made the first public audit.

After World War II, the US began a historic economic expansion. In this context, a succession of mergers and acquisitions happened within the firm to form the antecedent of what we know today as Deloitte. First, in 1948, just a year after George Bailey, then president of the American Institute of Certified Public Accountants, founded his own organization, they merged with Touche Niven and A. R. Smart to form Touche, Niven, Bailey & Smart, which would later become Touche Ross in 1969.

On the other hand, “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 this decade, information technologies became increasingly important in business and everyday life, affecting the accountant profession in every way. With the help of data processing machines, they started “developing and monitoring systems to improve the way clients managed.” Touche Ross was the leading competitor in this sense, being the organization to automate its bookkeeping in 1952. “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.”

Continuing with the simultaneous growth of the firms, in London in 1972, Deloitte’s firm merged with Haskins & Sells to form Deloitte Haskins & Sells. Meanwhile, in 1975 Touche Ross merged with Tohmatsu Aoki & Co, a firm based in Japan. Finally, the two firms merged in 1989 led jointly by J. Michael Cook and Edward A. Kangas. Although some of the member firms of both sides rejected the merger, they still became one of the largest accounting firms in the world.

“The information revolution and globalization offered the organization larger and more diverse challenges. With the dismantling of the Berlin Wall, the emergence of trading regions such as the European Economic Community, the growing economic power of the Pacific Rim and the growth in cross-border trade through agreements such as NAFTA, the organization’s clients demanded increasingly integrated cross-border solutions”

In 1995, the partners of Deloitte & Touche decided to create Deloitte & Touche Consulting Group (now known as Deloitte Consulting), a department dedicated to providing the global solutions their clients required. In order to do so, they needed to combine competencies across all disciplines and national borders; which they managed to do by hiring high-caliber recruits and training them to excel.

Between 2003 and 2005, Deloitte was divided into the following subsidiaries: Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP and Deloitte Tax LLP. Deloitte keeps improving and evolving to better match the needs of its clients and the society; focusing on its internal environment to “deliver high quality services to today’s leading companies—and tomorrow’s”.

“As Haskins noted more than 100 years ago, our “study and interest is the soundness of the world of affairs.’ Our goal continues to be to ‘simplify work so that it can be done more rapidly and more effectively.’” – Deloitte USA.