The head of Deloitte’s US operations has been chosen as the Big Four accounting firm’s next global boss, handing the reins to an executive from the audit side of the business at a time when growth has been driven by its larger consulting arm.
Joe Ucuzoglu will take over in January as rival EY pursues a break-up that will separate its consulting and audit businesses, forcing its competitors to decide whether to follow suit.
Top of his in-tray will be charting a course for Deloitte in response to the plan by EY, which it argues will create two more competitive businesses by removing conflicts of interest that restrict its advisers from working for audit clients. The EY plan is also expected to deliver multimillion-dollar windfalls to the highest earning partners.
Ucuzoglu is likely to face pressure from some partners to emulate EY’s proposed split. But Punit Renjen, Deloitte’s current global chief executive who rose through the ranks as a consultant rather than as an auditor, has backed the combined business model, saying in September it was “at the core” of the organisation.
“We will not monetise our collective life’s work or that of the generations that preceded us,” he said.
The appointment of Ucuzoglu, an auditor who has run Deloitte’s US arm since 2019, was announced by Deloitte’s global board on Monday, although it is subject to ratification later this month by member firms across 150 countries.
He had emerged as the frontrunner in recent months and was widely expected to be handed the top job, according to multiple people in the industry. Deloitte has typically picked a leader of its US firm to run the global business. Renjen was chair of the US firm when he was elected almost eight years ago.
As chief executive of Deloitte’s US business, Ucuzoglu is responsible for about 47 per cent of the firm’s global revenues.
In his new global role, he will not work for clients directly but will be responsible for managing the brand and the overall strategy of a network of locally owned partnerships operating under the Deloitte umbrella.
Deloitte’s annual revenues have grown more than two-thirds to $59.3bn since Renjen took over in 2015, making it the largest of the Big Four, which also includes EY, KPMG and PwC.
The 415,000-person firm has the smallest audit revenues of the quartet and has pushed heavily into other areas such as digital consulting.
Consulting was the fastest-growing of Deloitte’s business lines last year. Revenues increased 24.4 per cent to $25.8bn, thanks to booming demand for advisory services sold in alliance with groups such as Amazon Web Services and Google.
It also competes with tech-focused advisers such as New York-listed Accenture, which had revenues of $61.8bn in the 12 months to August, as well as the consulting division of IBM.
The firm also has tax and legal, financial advisory and risk advisory divisions, which sit alongside its audit and consulting operations.
Before becoming head of Deloitte’s US operations, Ucuzoglu ran the firm’s audit business in the US, and earlier in his career had served as an adviser to the chief accountant at the Securities and Exchange Commission, the regulator that oversees audit standards at American public companies.
Read the full article here