BDO is the world’s fifth largest accounting firm

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BDO has reported record global revenues of $8.1bn, which the world’s fifth largest accounting firm attributed to technological and regulatory disruption driving up demand for its services from clients.

The Brussels-headquartered firm registered the biggest revenue increase in its “business services outsourcing” arm, which helps companies with disparate international networks to simplify their accounting and back office frameworks.

Fee income in this division rose 10 per cent in the 12 months to the end of September. BDO’s China and US practices also registered 10 per cent revenue increases, while Norway grew 9 per cent.

Keith Farlinger, who became chief executive of BDO in October, said his firm was in “high demand because there is so much being disrupted at the moment” — largely by vast technological, political and regulatory changes.

“The complexity [our clients] are having to deal with — they just don’t have the in-house resources to handle that complexity,” he said.

He added that despite the growth in the firm’s fee income, he was not aiming to break into the ranks of the ‘Big Four’ accounting firms: Deloitte, EY, KPMG and PwC.

Deloitte and PwC both reported record revenues of $39bn and $38bn respectively this year, while EY registered an 8 per cent rise in revenues to $31bn. KPMG will publish its annual results this month.

“We are not looking to become part of the ‘Big Four’. We are looking to ensure our brand is one clients can rely on to help with their problems,” Mr Farlinger said.

“We are not focused on being the biggest. We are focused on being the best.”

BDO won several significant audit contracts in the latest financial year, including FTSE 250 outsourcing company Mitie from Deloitte; and Radian Group, the US-listed affordable housing provider also previously audited by Deloitte.

However European regulators’ attempts to reduce the hold of the “big four” on the audit market by introducing mandatory auditor rotation had not triggered a big uptick in mandate wins for BDO, Mr Farlinger added.

But the firm has picked up more advisory work — particularly in its tax division — because of the strengthening of independence rules that prevent audit firms from providing significant non-audit services to European companies.

BDO, which made 20 acquisitions in countries ranging from Armenia to Indonesia in the latest financial year, additionally saw headcount rise 9 per cent to 74,000 staff.

Although the pace of acquisitions is likely to slow down in the next financial year, BDO wants to do further deals in areas such as tax, IT consulting, cyber security and forensics, according to Mr Farlinger.

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