The profession of auditor has required competence, intelligence and reliability since its inception.
The origins of our international firm can be traced to England more than 150 years ago. Capital owners who invested in rapidly expanding enterprises in Europe and America during the second half of the XIX Century, wanted an accurate and reliable account of a firms' financial situation before they invested their money, providing the original demand for the audit profession.
In order to be trusted, those who evaluated a company's state of affairs had to be highly qualified professionals with impeccable reputations. William Deloitte, grandson of the French Count de Loitte who sought refuge in England during the turbulent times of the French Revolution, started to work at the age of fifteen getting hands-on experience in economics and accounting which in those days were not yet taught at universities. Ten years later, William opened his first office and started working for the benefit of his clients and the audit profession which, in 1854, was incorporated by the Royal Charter of the Society of Accountants in Edinburgh. This was first officially recognized association of accountants, and now has earned the reputation of being the leading professional institution in the business.
Near the turn of the 20th century "The Accountant" observed that William Deloitte - then almost 80 years old - had been in business longer that any other accountant and was certainly the oldest living practicing accountant of the time. He and his firm had been "widely and honorably known" for many years. The author noted: "Mr. Deloitte has the merit of having handled many important audit matters and has left his personal imprint upon the whole accounting profession". William Deloitte was indeed the one who set up important accounting systems such as that of the English Railways and the original system of hotel accounting which is now universally adopted by all major hotels worldwide.
In 1893, Deloitte went to America, where his firm eventually merged with a leading American accounting firm, Haskin & Sells, founded in 1895. The name of the merged firm was Deloitte, Haskins & Sells.
The firm Touche Ross also played an essential role in shaping the history of our present day international firm. Its founder, Sir George Touche, a Scot, professionally trained in Edinburgh with one of the first chartered accountants in the history of the profession, A.T. Niven, moved to London in 1883 at the age of 22. George Touche was charismatic, cultured and versatile, an excellent public speaker with a solid professional background, breadth of vision and strategic thinking. He was the first to realize that the analysis of company business, its potential for expansion and, above all, for its recovery following moments of crisis were all problems which required the information and expertise which only capable accountants and auditors could provide. George Touche acquired an excellent reputation for his competence and impeccable professional honesty, as well as for his preference for the restoration, rather than liquidation, of economic ventures in crisis.
In the early years of the 20th century, George Touche moved to New York together with J.V. Niven, son of his mentor, whose name was respected by the business community in the US as much as in Britain. There the two founded the firm Touche, Niven & Co. and opened their first office. Later they opened two more offices in Minneapolis and Chicago; subsequently another 6 offices established from coast to coast. In later years, the firm expanded into Canada, South America and France. It was during this period of international expansion that George Touche became acquainted with the Deloitte firm. Together those firms opened a joint office in Java to serve the rubber plantation business.
George Touche achieved success not only in accounting, but also in what is now often called the real economy. Near the end of his life, George Touche was a director of 11 major trust companies and chairman to 9 of them. During that period of time the auditing profession progressed in an unprecedented fashion. While there had been only 500 recognized accountants in the mid-1800s when William Deloitte and George Touche entered the field, this number increased to 40,000 by 1950 and to 120,000 by 1970. However, despite this substantial increase in the number of auditing firms, the companies established by William Deloitte and George Touche remained at the top in the field, providing efficient high quality services to their clients.
The 1989 merger of Deloitte, Haskins & Sells with Touche Ross substantially advanced the ability of the company to meet all its clients' needs. Each of the merging firms brought to the new company exceptional expertise and specialization within its own number of professional service areas.
The accounting profession developed concurrently with its expansion outside the countries where it had originated, as the approaches and principles laid down by its pioneers were adopted by their successors in other regions of the world. In Japan Nobuzo Tohmatsu founded the firm Tohmatsu & Co. in 1968 to contribute to the development of the Japanese economy. In the 30 years since its inception this firm had reached the top of the auditing sector in Japan. In the late 1990s, its staff numbered more than 1500 people and its client portfolio boasted the most prestigious Japanese multinationals. In 1988 Deloitte & Touche and Tohmatsu & Co merged to create the firm Deloitte Touche Tohmatsu with the capability to serve major clients in Europe, America, Australia, as well as in Asia. With such a global presence, our international network of firms became positioned on the cutting edge of the professional services industry in the increasingly interconnected world.